In Hyperledger Fabric, Smart Contracts are called chaincode. Unlike Ethereum, chaincode is not embedded directly inside the ledger itself. Instead, chaincode is installed on each peer node and interacts with the ledger to read and update state information about the assets the chaincode controls. Because the chaincode is signed and approved by all peers, and because each peer that uses a piece of chaincode must validate any state changes on the ledger, this system still allows distributed and trusted consensus, using smart contracts. To provide consistency, chaincode itself runs in an isolated Docker container.

Because of the modular nature of both the distributed ledger and the chaincode, multiple programming languages can be used to develop smart contracts; however, currently, the supported options are limited. There are full-featured SDK packages only for Go and Node.js, with eventual plans to add Java.