The New Aliyah Party evolved into the Progressive Party, and Rosen was elected to the Knesset in the 1949 elections. The party joined David Ben Gurion's Mapai in forming a coalition, and Rosen was made Israel's first Minister of Justice, an office to which he brought a strong reputation for intellect and probity.
The new party won the third largest number of seats in the 1961 elections but was not invited into the coalition, and Rosen lost his ministerial position. In order to consolidate opposition to Mapai's hegemony within Israeli politics, the Liberal Party merged with Herut to form Gahal. Rosen, however, was unhappy with the merger, and led a breakaway of seven MKs to found the Independent Liberals. He was elected to the sixth Knesset but resigned from the Knesset on December 23 1968, and retired from politics. His departure from the political stage was greeted by one newspaper as, "The end of the aristocracy" and in another by a cartoon captioned: "Another Channukah miracle!... An MK resigns because of age."
Rosen was a long-term friend of David Ben-Gurion who broke with Rosen after the Lavon affair, a botched Israeli sabotage operation in Egypt, in which Rosen sided with Lavon who had been (almost certainly falsely) accused of masterminding the mission, after which it is said Ben Gurion refused to talk to Rosen again.
On his death in Pinhas Rosen received a state funeral.
Rosen was married three times, first to Annie Lesser with whom he had two children, Hans and Dina, who with their mother settled in London in 1933 and whom Rosen visited regularly until the end of his life. In 1935 he married Hadassah Calvari with whom he had a daughter, Rivka, who died in 1942 aged seven, and Hadassah died of cancer in 1945. In 1950 he married Johana Rosenfeld who also predeceased him. Through his second and third wives he gained four step sons.