Lange entered parliament as the Member for Mangere in 1977 in a by-election. Prior to entering Parliament, he practised law in Northland and Auckland. He retired from Parliament in 1996. His successor was Labour Party colleague Taito Philip Field.
Although nominally a Labour Party government, a rapid programme of deregulation and privatisation appeared to take inspiration more from Reaganomics and Thatcherism than traditional left wing values. During the early years yuppie culture flourished and the stock market boomed as investment companies flourished.
Lange gave something back to the left with a long running campaign against nuclear weapons. Visits of warships from the United States ended when the USA refused to confirm or deny that any particular vessel was carrying such weapons, and New Zealand was effectively detached from the ANZUS alliance. Relations with France were also strained by Rainbow Warrior affair from July 10, 1985. One of the highlights of this period was a widely televised Oxford Union debate in 1985 where Lange, a skilled orator, argued for the proposition that "nuclear weapons are morally indefensible", in opposition to Jerry Falwell.
The stock market crash of October 19, 1987 showed that the financial bubble had little substance (similar to the Enron debacle of 2001) and many of the high-flying companies proved to be worthless. In 1988 consensus on economic policy amongst the Labour leadership finally broke down, with Lange dismissing finance minister Roger Douglas after Douglas proposed a radical flat income tax.
Lange also held office as Minister of Foreign Affairs (1984 to 1987) and Minister of Education (1987 to 1989). Upon his replacement as party leader and prime minister by Geoffrey Palmer in 1989, he was (from 1989 to 1990) Attorney-General, the Minister in Charge of the Serious Fraud Office and a Minister of State.