Direct democracy means that decisions crucial for the state are taken directly by the sovereign himself. This form of exercising power is currently only a supplement of representative democracy. There are many institutions meant to allow direct participation of the nation in taking decisions. Contemporary the most common form of direct democracy is a referendum which is based on taking decisions regarding important matters of state by voting of those entitled. The evolution of the institution of the nationwide referendum in Latvian law (constitutional and statutory provisions as well as the practice of application thereof) is the subject matter of this paper.