From 1995 until 2000 Ferrero-Waldner served as Under-Secretary of State in two governments led by Social Democrats Franz Vranitzky and Viktor Klima.

When Wolfgang Schüssel became Chancellor of Austria early in 2000 he made Ferrero-Waldner his Minister for Foreign Affairs, a position she held until October 2004, when she was succeeded by Ursula Plassnik.

As the EU's External Affairs Commissioner, Ferrero-Waldner is credited with being the key diplomat in the 24 July 2007 release of five Bulgarian nurses and a Palestinian doctor imprisoned by Libya.

Since leaving politics, she has held a variety of paid and unpaid positions, including the following: In February 2020, Ferrero-Waldner joined around fifty former European prime ministers and foreign ministers in signing an open letter published by British newspaper The Guardian to condemn U.S. president Donald Trump's Middle East peace plan, saying it would create an apartheid-like situation in occupied Palestinian territory.

In 1993 Waldner married Francisco Ferrero Campos, a lecturer in Spanish and Latin American literature at the University of Vienna.