The municipality also encompasses Birkholm and the uninhabited islands Lilleø, Dejrø and Halmø.

[2] The Danish municipal reform was implemented Monday 1 January 2007, but politicians on Ærø were given permission to unify the island one year ahead of the rest of the municipalities that were merged as a result of the reform.

From 1 January 2006 until 31 December 2006 Ærø Municipality belonged to Funen County.

The new municipality belonged to Funen County in 2006 and became part of the new Region of Southern Denmark on 1 January 2007.

Ærø's municipal council consists of 15 members, elected every four years.