Al-Ḥākim governed through an unusually concentrated form of monarchy. He had no vizier, relying instead on a chief of the dīwān who acted as intermediary between imam and subjects. He also stopped appointing a permanent army chief, choosing generals for particular operations. His hostility toward courtiers arose from his early observation of palace corruption and from his dependence on his tutor Bardjawān during a dangerous conflict with the Kutāmites.

The imam attempted to remove the administrative and military intermediaries separating him from the population. He ordered the execution of officials whom he suspected of dishonesty or personal ambition and spent time in Fustat among its artisans and merchants, including Sunnites. His attempt to create a direct monarchy based on the support of urban middle classes failed, however, because it did not secure the approval of the Sunnites of Fustat.

His religious policy changed repeatedly. He first sought to establish Fatimid ritual in Fustat, then pressured Christians and Jews to convert and built mosques over their places of worship. In 1009 he ordered the destruction of the Holy Sepulchre in Jerusalem. He later tolerated the Sunnite rite, appointed Sunnite teachers to the Dar al-ʿIlm, prohibited Sunnite practice again, and permitted Persian preachers to proclaim his divinity in 1017.

The political and psychological pressures of absolute rule increasingly affected his conduct. After the failure of his religious and political projects, he withdrew from Fustat, walked alone on the Muqaṭṭam, and authorized Christians and Jews to renounce the Islam he had previously imposed. His disappearance was treated as a murder arranged by his immediate entourage, who feared further purges. Some adherents of his divinity later founded the Druze sect in Syria.