Modern plural societies characterized by ethno-cultural diversity are forming demand for eff ective balance of inter-group relations. The institutionalization of language policy is becoming the way of inter-ethnic relations regulation. The problem of language policy implementation is the relevance in modern European federations, the boundaries of which are overlap on the boundaries of the linguistic communities’ residence. In such cases the language policy of the federal center includes the impact on the federal and regional authorities’ relations. Switzerland is the research interest as one of the most decentralized federations in Europe. The compact residence of four linguistic communities’ impact on the institutional foundations of the federal structure. The existing interaction of models between central authorities and cantons requires consideration as a tool for normalizing and infl uencing relations in plural societies. In this article the authors consider the infl uence of federalism and federal principles on development of language policy. The article reveals the regulatory framework of Swiss federalism, its institutional foundations, which impact on regulation of the language regime, both at the federal and regional levels. Based on the statistical data, an assessment is made of the language situations in the monolingual and bilingual cantons. The authors capture the main principles of the Swiss language regime. The principles of equality of languages, free language choice for the regions and the formal consolidation of languages’ territoriality as the basis for the stability of the Swiss model of federalism. It is concluded that federalism observed the harmonization of the language situation due to division of federal and regional powers.