[1] Paeniu made his entrance on the political scene in November 1989, when he won a seat in the Parliament of Tuvalu following a by-election.

In the subsequent parliament the members were evenly split in their support of Bikenibeu Paeniu and the former Prime Minister Tomasi Puapua.

As the result the vote on a motion of no confidence Kamuta Latasi resigned and Bikenibeu Paeniu was elected as prime minister for the second time.

Paeniu successfully led moves to revert the flag to a previously used design which included the British Union Jack.

In addition, he served as Minister of Finance and Economic Planning in the cabinets of Koloa Talake,[9] Saufatu Sopoanga and Maatia Toafa.