Majlis Perbandaran Pekan Bandar Diraja melaksanakan fungsi-fungsinya menggunakan Akta Kerajaan Tempatan 1976 (AKTA 171) dan melaluinya MDP boleh melaksanakan aktiviti dan menguatkuasakan dasar serta peraturan-peraturan yang berkaitan dengan hal ehwal Pihak Berkuasa Tempatan. Antara fungsi MPP ialah :-
- Licensing and monitoring of business, advertisements and petty traders.
- Planning and monitoring development including Structure Plan.
- Coordinating and assisting in the development of Pekan or other new towns.
- Monitoring buildings, advertising and billboards.
- Monitoring and managing the beautification and landscaping of the town.
- Building and maintaining roads, drinage and managing traffic system.
- Providing and organising public facilities including markets, stalls, community halls, sports complexes, children's playgrounds, bus stops and others such as recreational and relaxation facilities.
- Overseeing the waste disposal and cleanliness of the town.
- Providing the waste disposal and cleanliness of the town.
- Upgrading basic facilities, raising the status of villages which progressive and encourage economic activities.