Shortly after his initial election, he was diagnosed with thyroid cancer, temporarily lost his voice and considered resigning from politics, but he made a full recovery after undergoing surgery.

Ozawa joined the political faction led by Kakuei Tanaka, which then supported Prime Minister Eisaku Satō.

By the 1980s, he became one of the popular young leaders in the LDP, along with Tsutomu Hata and Ryutaro Hashimoto, both of whom were later elected as prime ministers, in the Tanaka/Takeshita faction.

After long service on key parliamentary committees, Ozawa's first ministerial appointment was in 1985 when he took on the Home Affairs portfolio under Yasuhiro Nakasone.

Prime Minister Yasuhiro Nakasone was impressed with his negotiation skills, particularly his ability to persuade opposition parties to pass difficult consumption tax legislation.

(Kiichi Miyazawa, twenty years his senior, once addressed Ozawa as "Great Secretary General" in a leadership meeting).

Ozawa became deputy chairman of the Takeshita faction under Shin Kanemaru's leadership, and became LDP Secretary General from 1989 to 1991.

However, Ozawa was hurt by a poor LDP showing in the Tokyo gubernatorial election of 1991 as well as heart problems that surfaced around that time.

The faction's eight member steering committee nominated Obuchi as chairman by a 5–0 vote, with Ozawa and two of his supporters having boycotted the meeting.

This was done both as a gesture of neutrality to the other coalition members, and as a means of keeping Hata in the wings as a future option if Hosokawa proved unsuccessful.

He capitalised on his reputation in 1993 by publishing a clear statement of his principles in the book Blueprint for a New Japan (日本改造計画, Nihon Kaizō Keikaku).

Eventually, the Socialists left to form a coalition with the LDP, leaving Tsutomu Hata in charge of a minority government that fell in June 1994.

Most commentators believed that a new Ichi-Ryu War would finally provide a genuinely competitive two-party system in Japanese politics.

The YKK partnership of Taku Yamasaki, Junichiro Koizumi and Koichi Kato was strongly opposed to Ozawa, along with anti-reformer Hiromu Nonaka.

Powerful faction leader Shizuka Kamei supported Ozawa, chiefly due to similar views on military reform.

The Economist called Ozawa an "increasingly ineffectual bully" in July 2007 and partially blamed him both for enervating reformists in his own party and for DPJ failure to profit from LDP predicaments.

[10] Nonetheless, Ozawa led the party to its largest victory in history in the upper house election on 29 July 2007.

The DPJ won an overwhelming victory in the 2009 election and Hatoyama became prime minister, and it was believed that Ozawa's influence would increase further.

[25] The Tokyo District Court rejected most of the depositions taken by prosecutors in the case on procedural grounds,[20] and Ozawa was eventually acquitted in April.

[29] Shortly before the 2012 general election, Ozawa and the members of PLF merged with the newly founded Tomorrow Party of Japan of Shiga governor Yukiko Kada.

[32] Long after he last held an influential party post, Ozawa remains widely respected in opposition circles.

[35] In November 2023, Ozawa publicly said of CDP's leader Kenta Izumi that "It would be better if he resigns (as representative)" following a statement by Izumi that he aimed to change the government within the next five years, with Ozawa criticizing the words and stating that "What will the people think if the main opposition party says it won't aim for the government?

Earlier in the same year, he founded a parliamentary faction inside the CDP, leading to the belief that Ozawa is looking to build up his influence again in preparation of another opposition leadership election.

[36] He has stated that, in light of the 2023–2024 Japanese slush fund scandal, people should not discount Prime Minister Fumio Kishida, saying that "You have to be careful.

[42] Ozawa won back his district in Iwate during the election, which saw the incumbent LDP-Komeito coalition lose its majority in the House of Representatives.

The wide political spectrum in the Democratic Party forced Ozawa to take eclectic approaches, which has become a main source for criticism against him.

The article was published as a rebuttal to a UN political officer who criticised Ozawa's position to oppose Japan's continual support of the maritime interdiction forces in the Indian Ocean.

[50] The article was published with the intent to provide a viable alternative to the government's plan to continue stationing the Maritime Defense Forces for logistical support of Operation Enduring Freedom in Afghanistan.

However, faced with mounting criticism from both sides of the political spectrum, Ozawa later softened his statement and explained that his intent was to deploy the GSDF (Ground Self-Defense Forces) for logistical support of the civilian component of ISAF, presumably suggesting the PRT or Provincial Reconstruction Team which is a civil-military cooperation unit that works on reconstruction efforts in the provincial areas of Afghanistan.

[55] In June 2012, the magazine Shukan Bunshun published a letter from Kazuko stating that the couple would divorce, alleging that "Ozawa ran away with his secretaries because of fear of radiation" in the wake of the Fukushima disaster of March 2011.