A key passage that answers your question is Revelation 21:1-4, “Now I saw a new heaven and a new earth, for the first heaven and the first earth had passed away. Also there was no more sea. Then I, John, saw the holy city, New Jerusalem, coming down out of heaven from God, prepared as a bride adorned for her husband. And I heard a loud voice from heaven saying, ‘Behold, THE TABERNACLE OF GOD IS WITH MEN, AND HE WILL DWELL WITH THEM, and they shall be His people. God Himself WILL BE WITH THEM and be their God” (NKJV).

The creation of the New Heaven and the New Earth follows the 1,000 year reign of Christ and the final judgment of all unbelievers at the Great White Throne (see Revelation 19:11-20:15). The present heaven and earth will have been destroyed (Revelation 20:11 and 2nd Peter 3:10, 12), making way for the new heaven and new earth which shall never be destroyed. Let’s read what the Apostle Peter had to say about this, “Looking for and hastening the coming of the DAY OF GOD, because of which the heavens will be dissolved, being on fire, and the elements will melt with fervent heat…nevertheless we, according to His promise, look for new heavens and new earth in which RIGHTEOUSNESS DWELLS.”

Notice, Peter calls this the “day of God” and adds “in which righteousness dwells.” This is the “eternal state” where sin will never again break out and mar God’s wonderful creation. We read that “the tabernacle of God is with men, and He will dwell with them.” This has never been true before, for sin made it impossible for God to live with all men on earth. It is true He had visited earth before and lived among men, but this was confined to the nation of Israel when they were blessed with His presence in the Tabernacle in the wilderness and later in Solomon’s Temple in the land of Israel. Exodus 40:34 and 1st Kings 8:10-11 teach us this, “Then the cloud covered the tabernacle of meeting, and the glory of the LORD filled the tabernacle….And it came to pass, when the priests came out of the holy place, that the cloud filled the house of the LORD…the glory of the LORD filled the house of the LORD.” But this was short-lived, for the glory had to depart due to the sins of Israel, “Then the glory of the LORD departed from the threshold of the temple” (Ezekiel 10:18). Later, God sent His only Son to live among the children of Israel, as we see in John 1:14, “And the Word became flesh and DWELT AMONG US, and we behold His glory, the glory as of the only begotten of the Father, full of grace and truth.” But this too was short-lived, for the nation of Israel rejected God’s Son as their Messiah and had Him crucified. “He came to His own, and His own did not receive Him…And they shouted, saying, “Crucify Him, crucify Him!” (John 1:11 and Luke 23:21). But as we have seen, the glorious DAY is coming, “the Day of God,” when GOD WILL DWELL WITH MEN and He will never leave them, for sin will never rear its ugly head again causing God to depart from men.

Now as to your specific question, “Will God rule from heaven or will He be with those inside the New Jerusalem.” We believe when it says, “The tabernacle of God is with men,” it means ALL MEN, not just those who are living in the New Jerusalem (which is a heavenly city…see Hebrews 12:22). He will live with the redeemed that are living in heaven AND He will live with the redeemed on the new earth. ALL MEN will have access to and enjoy intimate fellowship with God (the Father, the Son and the Holy Spirit). ALL MEN will be HIS PEOPLE and God will be THEIR GOD (as we saw in Revelation 21:3). I conclude from this that since God dwells among all men, He is ruling from both heaven and earth. (338.3) (DO)