Since 2000, a series of fundamental structural reforms have been implemented in Japan, increasing political autonomy and citizen participation on the municipal level. The Comprehensive Laws on Promoting Decentralization, put into effect by the national government in 2000, serve as the main pillar for current changes in local governance. The article examines the local output of devolution and fiscal decentralization, drawing on Japanese decentralization literature and employing case studies of two municipalities in the Tokyo metropolitan area. The analysis finds that administratively and fiscally decentralized local government structures are indispensable for enhancing political autonomy. Moreover, the case studies demonstrate that an active civil society and opportunities for political participation that offered by the municipalities are essential to strengthen local democracy. Although Japanese municipalities have not enhanced their local autonomy to the extent that devolution would permit, they pay more attention to citizens’ opinions and participation than before the reforms.