After his predecessor V.P. Singh resigned, he led a breakaway faction of the Janata Dal, known as the Samajwadi Janata Party (Rashtriya). He became the eighth Prime Minister of India on 10 November 1990 as Congress decided to extend outside support to his government. The relationship crumbled quickly, as the Congress party accused him of spying on Rajiv Gandhi, their leader at that time. The Congress Party then boycotted Parliament and as Shekhar's faction only had 64 MPs, he resigned in a nationally televised address on 6 March 1991. He remained in office until national elections could be held later that year.

It was during these elections that Rajiv Gandhi was assassinated.

Shekhar was known for abiding by the parliamentary conventions and was honoured with the inaugural Outstanding Parliamentarian Award in 1995.Shekhar was a member of the Lok Sabha, India's lower house of Parliament. He led the Samajwadi Janata Party (Rashtriya), (Socialist People's Party (National)). Starting in 1977, he won elections to the Lok Sabha eight times from Ballia constituency in eastern Uttar Pradesh. The only election that he lost was in 1984 against Jagganath Chaudhary of Congress (I).