In Marbury v. Madison, the U.S. Supreme Court asserted its power to review acts of Congress and invalidate those that conflict with the Constitution.
During the first two administrations, President George Washington and President John Adams appointed only Federalist Party members to administration and judiciary positions. When Thomas Jefferson won the 1800 election, President Adams, a Federalist, proceeded to rapidly fill the judiciary bench with members of his own party, who would serve for life during "good behavior." In response, Jeffersonian Republicans repealed the Judiciary Act of 1800, which had created several new judgeships and circuit courts with Federalist judges, and threatened impeachment if the Supreme Court overturned the repeal statute.
Although President Adams attempted to fill the vacancies prior to the end of his term, he had not delivered a number of commissions. Thus, when Jefferson became President, he refused to honor the last-minute appointments of President John Adams. As a result, William Marbury, one of those appointees, sued James Madison, the new Secretary of State, and asked the Supreme Court to order the delivery of his commission as a justice of the peace.
The new chief justice, John Marshall, understood that if the Supreme Court issued a writ of mandamus (i.e., an order to force Madison to deliver the commission), the Jefferson administration would ignore it, and thus significantly weaken the authority of the courts. On the other hand, if the Court denied the writ, it might well appear that the justices had acted out of fear. Either case would be a denial of the basic principle of the supremacy of the law. Instead, Marshall found a common ground where the Court could chastise the Jeffersonians for their actions while enhancing the Supreme Court's power. His decision in this case has often been hailed as a judicial tour de force.
Basically, he declared that Madison should have delivered the commission to Marbury; however, he ruled that the Court lacked the power to issue writs of mandamus. While a section of the Judiciary Act of 1789 granted the Court the power to issue writs of mandamus, the Court ruled that this exceeded the authority allotted the Court under Article III of the Constitution and was therefore null and void. So, while the case limited the court's power in one sense, it greatly enhanced it in another by ultimately establishing the court's power to declare acts of Congress unconstitutional. Just as important, it emphasized that the Constitution is the supreme law of the land and that the Supreme Court is the arbiter and final authority of the Constitution. As a result of this court ruling, the Supreme Court became an equal partner in the government.