GCHQ is a Civil Service Department under the Ministerial responsibility of the Secretary of State for Foreign and Commonwealth Affairs. GCHQ provides Government Departments and Military Commands with signals intelligence (Sigint) in accordance with requirements laid upon it by the JIC (as for SIS) in support of HMG's security, defence, foreign and economic policies. It was established in 1946 as the post-war successor of the Government Code and Cipher School which had been the central Sigint organisation since 1919 and had made an outstanding contribution to the War effort at Bletchley Park, for example by decrypting German messages enciphered by the ENIGMA machine. In 1953 GCHQ moved to two sites on the outskirts of Cheltenham. In 2003 it moved to a new consolidated building, locally known as the 'Doughnut', due to its design.

It derives signal intelligence by monitoring a variety of communications and other signals, such as radar’s. For this purpose it controls and administers the Composite Signals Organisation which operates from a number of locations in the UK and overseas. The Composite Signals Organisation Station, Morwenstowe (Bude, Cornwall) is directly subordinate to GCHQ. Like SIS and the Security Service, it also works in liaison with a range of foreign intelligence and security services.

In addition to providing signals intelligence, GCHQ also provides advice and assistance to Government Departments and the Armed Forces on the security of their communications and information technology systems.
This task is undertaken by the Communications Electronics Security Group of GCHQ, which works closely with their customers and industry, as well as with the Security Service, to ensure that official information in such systems is properly protected. CESG is the UK's National Authority for the official use of cryptography, and the National Technical Authority for information security more generally. CESG's primary customers are people handling and processing official information - usually within government departments large and small and the three services, but also in agencies and firms carrying out work on government's behalf. CESG is in principle open to requests for advice from other sectors, but are not currently resourced to service these on any large scale. CESG now operates on a cost-recovery basis, charging for customer-specific services while providing general national authority services (policy, standards, etc.) to the official community at large at no direct cost. Generally, CESG does not manufacture security equipment, but rather works closely with industry to ensure the availability of a range of suitable products and services to meet official needs, and of the infrastructures to support those services. At the end of the Cold War some 6,000 people worked for GCHQ.