Each region in the Second Life "grid" runs on a single core of a multi-core server, running proprietary software based on Debian. These servers run scripts in the region, as well as providing communication between avatars and objects present in the region.

Every item in the Second Life universe is referred to as an asset. This includes the shapes of the 3D objects known as primitives, the digital images referred to as textures that decorate primitives, digitized audio clips, avatar shape and appearance, avatar skin textures, LSL scripts, information written on notecards, and so on. Each asset is referenced with a universally unique identifier or UUID.

Assets are stored in their own dedicated MySQL server farm, comprising all data that has ever been created by anyone who has been in the SL world. As of December 2007[update], the total storage was estimated to consume 100 terabytes of server capacity. The asset servers function independently of the region simulators, though the region simulators request object data from the asset servers when a new object loads into the simulator.[citation needed]

Each server instance runs a physics simulation to manage the collisions and interactions of all objects in that region. Objects can be nonphysical and non moving, or actively physical and movable. Complex shapes may be linked together in groups of up to 255 separate primitives. Additionally, each player's avatar is treated as a physical object so that it may interact with physical objects in the world. As of 1 April 2008 (2008 -04-01)[update], Second Life simulators use the Havok 4 physics engine for all in-world dynamics. This engine is capable of simulating thousands of physical objects at once.

Linden Lab pursues the use of open standards technologies, and uses free and open source software such as Apache, MySQL and Squid. The plan is to move everything to open standards by standardizing the Second Life protocol. Cory Ondrejka, former CTO of Second Life, has stated that a while after everything has been standardized, both the client and the server will be released as free and open source software.