In 1919, Bayar was elected to the Ottoman Parliament in Istanbul as deputy of Saruhan (today Manisa). Because he did not agree with the new form of constitution determined by the sultan, he went in 1920 to Ankara to join Mustafa Kemal by the Turkish Independence Movement. He became an active member of the "Müdafaa-i Hukuk Cemiyeti" (Association for Defense of Rights of Anatolia and Rumelia), another political organization formed after the World War I. He became deputy of Bursa in the newly established Grand National Assembly of Turkey. The same year, he served as deputy Minister of Economy and on February 27, 1921 he was appointed as Minister of Economy. He led the negotiation commission during the Çerkes Ethem uprising. In 1922, Bayar took part in the Turkish delegation during the Lausanne Peace Conference as an advisor to İsmet İnönü. After the elections in 1923, he served as deputy of İzmir in the parliament. On August 26, 1924, he founded Türkiye İş Bankası in Ankara and was its Managing Director until 1932.
On October 25, 1937 Mustafa Kemal Atatürk appointed him as prime minister of the 9th government after İsmet İnönü left the government. He continued to serve as prime minister when Atatürk died and İnönü became president in 1938. Differences of opinion with Inönü led him to lay down his office on January 25, 1939.
Until 1945, he was a member of Cumhuriyet Halk Partisi (the Republican People's Party), a social-democratic, republican, Turkish nationalist party. Then on January 7, 1946, he founded Demokrat Parti (the Democratic Party), a socially conservative economically liberal party, along with Adnan Menderes, Fuat Köprülü and Refik Koraltan. The DP won, with 408 of 487 seats, a majority in the first free general elections in Turkish history on May 14, 1950. The parliament elected Bayar, the chairman of the DP, as president of Turkey. He was subsequently re-elected in 1954 and 1957, serving for 10 years as president. In that period, Adnan Menderes was his prime minister.
Bayar was pardoned in 1966 Full political rights were restored to him in 1974, but he declined an invitation to become a life member of the Senate, on the grounds that one can represent the people only if elected He died on August 22, 1986 in Istanbul at the age of 103. He was father of three children.