A system and method are disclosed which utilize an on-chip oscillator to provide the appropriate clock frequency for components of the chip to manage power consumption by the chip. More specifically, in a preferred embodiment of the present invention, an on-chip oscillator is utilized to provide the clock frequency for the chip's core circuitry, and such oscillator can dynamically adjust such clock frequency to manage the chip's power consumption. Thus, such on-chip oscillator generates the processor clock instead of the usual synchronous, externally controlled clock generator. A preferred embodiment of the present invention utilizes a voltage controlled frequency oscillator to control the chip's clock frequency in order to dynamically manage power consumption by the chip. Such oscillator is preferably operable to adjust its output frequency based on the voltage supplied to such oscillator to effectively manage the chip's power consumption.