The primary source of law in Saudi Arabia is the Islamic Sharia. Sharia is derived from the Qur'an and the traditions of Muhammad contained in the Sunnah; ijma, or scholarly consensus on the meaning of the Qur'an and the Sunnah developed after Muhammad's death; and Qiyas, or analogical reasoning applied to the principles of the Qur'an, Sunnah and ijma. The Wahhabi interpretation of Islam used in Saudi Arabia uses qiyas only in cases of "extreme necessity".

Muslim countries that retain or adopt Sharia usually determine which parts of the Sharia are enforceable and codify (and thereby modernize) them. Unlike other Muslim countries, Saudi Arabia regards uncodified Sharia in its entirety as the law of the land and does not interfere with it. It is, therefore, unique not only when compared to Western systems, but also in comparison to other Muslim countries, and according to one source is the closest system in the modern world to the form of Sharia adopted at the advent of Islam.

The lack of codification of Sharia leads to considerable variation in its interpretation and application. Furthermore, there is no system of judicial precedent, as Wahhabism rejects the imitation of past scholarship (taqlid) in favor of independent reasoning (ijtihad). However Saudi judges are expected to consult six medieval texts from the Hanbali school of jurisprudence before reaching a decision. The Hanbali school is noted for its literalist interpretation of the Qur'an and hadith. If the answer is not found in the six Hanbali texts, the judge may then consult the jurisprudence of the other three main Sunni schools or apply his independent judgment and legal reasoning, referred to as ijtihad.

Nevertheless, because the judge is empowered to disregard previous judgments (either his own or of other judges) and can apply his personal interpretation of Sharia to any particular case through ijtihad, divergent judgements arise even in apparently identical cases. There is a presumption against overturning a decision when it is based on ijtihad. This principle is crucial in two respects. Firstly, it concentrates the substance of the law in the hands of judges as, in consequence, there is a presumption that only a judge exercising ijtihad, rather than a king or a parliament, can determine God's law. Secondly, it renders a judge's decision practically immune to reversal on appeal. The role of ijtihad has led to calls for the Sharia to be codified to give clarity and remove uncertainty. As a result, in 2010, the Minister of Justice announced plans to implement a codification of Sharia law, although resistance from the religious establishment is reportedly delaying its implementation.

Royal decrees (nizam) are the other main source of law but are referred to as regulations rather than laws to indicate that they are subordinate to the Sharia. Royal decrees supplement Sharia in areas such as labor, commercial and corporate law. Additionally, other forms of regulations (lai'hah) include Royal Orders, Council of Ministers Resolutions, Ministerial Resolutions and, Ministerial Circulars, and are similarly subordinate to Sharia. Any Western commercial laws or institutions are adapted and interpreted from the standpoint of Shariah law.

Additionally, traditional tribal law and custom remain significant. For example, judges will enforce tribal customs pertaining to marriage and divorce.

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