He joined the socialist movement and was elected secretary of the district Praja Socialist Party (PSP), Ballia. Within a year, he was elected joint secretary of the PSP’s State unit in Uttar Pradesh. In 1955–56, he took over as general secretary of the party in the State. His career as a parliamentarian began with his election to the Rajya Sabha from Uttar Pradesh in 1962. He came under the spell of Acharya Narendra Dev, a fiery Socialist leader in the beginning of his political career. From 1962 to 1967, Shekhar belonged to the Rajya Sabha, the Upper house of the Parliament of India. He had a nationwide padayatra in 1983 to know the country better, which he claimed gave the jitters to Indira Gandhi, the then Prime Minister. He was called a "Young Turk".

Chandra Shekhar was a prominent leader of socialists. He joined Congress in 1964. From 1962 to 1967, he was a member of the Rajya Sabha. He first entered the Lok Sabha in 1967. As a member of the Congress Party, he vehemently criticised Indira Gandhi for her activities. This led to a split in the Congress in 1975. Chandrashekhar was arrested during the emergency and sent to prison.

After the emergency, he became the President of Janata Party. In the parliamentary elections, Janata Party did very well and formed the coalition government headed by late Morarji Desai. In 1988, his party merged with other parties and formed the government under the leadership of V.P. Singh. Again his relationship with the coalition deteriorated and he formed another party, Janata Dal socialist faction. With the support of Congress (I) headed by Rajiv Gandhi, he replaced V.P. Singh as the Prime Minister of India in November 1990.