In 1962 he joined the illegal and secret Socialist Youth movement and, two years later, the equally clandestine Spanish Socialist Workers' Party (PSOE). It was also at Seville University that he met Carmen Romero Lopez, whom he married in 1969.

By the mid-1960s the economic and social situation in Spain had changed considerably from the hunger and scarcities of the 1940s. The Franco regime had abandoned autarchy and Spain had been reincorporated into the world capitalist system. Politically, however, the regime had not changed at all. Strikes were illegal, but became increasingly frequent in these years, as did demonstrations, go-slows, lock-outs, unfair dismissals, and numerous other manifestations of conflict between employers and workers. When Gonzalez graduated from Seville University in 1966, he set up the city's first labor counseling office and, as a lawyer specializing in labor cases, acted on behalf of the employees in various parts of the country in some of the most important disputes of the time.

While he was advancing his professional career, Gonzalez was also gaining a name for himself as a member of the clandestine Socialist party. In 1939 most of the party's surviving leaders had left Spain for exile. Inside the country a minimal organizational structure managed to keep going, from which new leaders began to emerge. Felipe Gonzalez was one of this new generation of activists. In 1965 he became a member of the Seville provincial committee and, later, of the national committee. In 1970 the PSOE held its 11th congress and Gonzalez was elected to the party's most important internal body, the executive commission. By then Gonzalez and his contemporaries in the PSOE felt increasingly uncomfortable with an aging exiled party leadership that seemed to be divorced from the realities of contemporary Spain.

In 1974 at the 13th party congress held at Suresnes near Paris, Gonzalez was elected as the party's first secretary-general. His election represented the triumph of the "new" PSOE over the "historic" sector. It also constituted the recognition of Gonzalez as a major figure within the Spanish socialist movement and the beginning of a new phase in his political career. As leader of the PSOE (with the nom de guerre "Isidoro") his political responsibilities and activities had already increased when, in November 1975, General Franco died, opening the way to the legalization of a multi-party system in Spain. Throughout 1976 Gonzalez traveled widely in Europe discussing the political future of Spain and of the PSOE with the leaders of other European socialist parties. He established particularly strong links with the West German Social Democratic party. At home he participated in negotiations between the centrist government of Adolfo Suarez and the opposition parties which were designed to achieve consensus on the need for moderate reformist policies, rather than radical change, in order to ensure a peaceful transition to democratic rule. When the first free elections in 41 years were held in June 1977 the PSOE became the main opposition party in the Spanish Cortes (parliament).

Under the leadership of Gonzalez, the PSOE worked to consolidate Spain's nascent democracy and to increase its own appeal to the progressive, but moderate, sectors of Spanish society. In May 1979 at the 28th party congress, Gonzalez resigned as secretary-general when the majority of the delegates rejected his motion that the word "Marxist" be dropped from the party's definition of itself. Four months later, however, at an extraordinary congress, he was reinstated and the motion was carried. Giving the party a social democratic image earned Gonzalez criticism from the left wing of his party, but it paid dividends with respect to the electorate. In October 1982 the PSOE won a landslide victory at the polls and Gonzalez became Spain's first Socialist prime minister since 1939.

Gonzalez' personal charisma, his prestige as a politician, and his control of the PSOE's executive apparatus subsequently enabled him to weather a number of internal storms and to implement controversial policies. Most notably, the leader of the PSOE altered decisively the party's position on Spanish membership of NATO. The PSOE was strongly opposed when Spain joined the North Atlantic Treaty Organization (NATO) in 1981. After the 1982 election, however, the Gonzalez government and the majority of the PSOE advocated remaining in the alliance. In a referendum held in March 1986 the question was decided in favor of retaining NATO membership. Three months later Gonzalez again led his party to victory in a general election. He won his third term in office in the elections held on October 29, 1989, although this time, unlike the two previous occasions, the PSOE did not secure an absolute majority in the Cortes.

During Gonzalez's mandate, Spain definitively left behind the international isolation of the Franco years, becoming a member of the European Economic Community in 1986 and of the Western European Union in 1988. Prime Minister Gonzalez maintained close relations with a number of Latin American leaders and, as vice-president of the Socialist International, took a particular interest in national and international efforts to resolve the problems occasioned by economic and political instability in Central America.

After serving his forth consecutive term, Gonzalez announced in June 1997 that he would not seek re-election. His withdrawal followed a series of financial and political scandals. The most serious were charges against some 20 political and police officials under Gonzalez, including a former Interior Minister, over organizing squads that killed Basque separatists in the 1980s.

The history of the PSOE from 1879 to 1982 is competently recounted by Richard Gillespie in his The Spanish Socialist Party (1989). There is, as yet, no analysis in English of the PSOE in power, but Paul Preston's The Triumph of Democracy in Spain (1986) provides inter alia, an acute analysis of the role of the Spanish Socialist party in the transition from dictatorship to democracy. See also Santos Julia, "The Rights and Wrongs of Self-Avowed Marxism: The Ideological Conversion of the Leaders of the PSOE between 1976 and 1979" in Frances Lannon and Paul Preston, editors, Elites and Power in Modern Spain (1990). A good history of the Spanish Civil War is Gabriel Jackson, The Spanish Republic and the Civil War, 1931-1939 (1965).