A programmable state machine is incorporated into the core of a network processor (NP) to monitor the utilization of different processing elements in the NP and to control the power state of each element as a function of past and predicted utilization. The state machine can be used to control a centralized power management control unit or to control a distributed power management unit where each processing element includes its own state machine. The function of the power management state machine can be implemented in any combination of software and/or hardwired logic, depending on the system design requirements. The monitoring and control are implemented through the use of a power management state change algorithm. The determination of the power state of a processing element accommodates interdependencies between the elements. It also makes adjustments in gain factors in response to actual performance and utilization of the network processor.