He was Minister of Employment from 1 October 1977 to 10 September 1982 in the Cabinet of Anker Jørgensen II, III, IV, and V. In 1987 Svend Auken succeeded Jørgensen as leader of the Danish Social Democrats, at that time an opposition party to the government of Prime Minister Poul Schlüter.

After making big gains in the 1990 general election, he was subsequently unable to put together a workable coalition, partly because of bad personal relations with prominent politicians in the traditional coalition party of the Social Democrats, Det Radikale Venstre (The Social Liberal Party of Denmark).

His position as leader of the Social Democrats was challenged in 1992 by Poul Nyrup Rasmussen, who went on to win the internal election.

After the defeat of Rasmussen's government in the general election of 2001, Svend Auken continued to serve as a member of the Danish parliament.

Svend Auken was generally acknowledged to be one of the most naturally gifted and charismatic Danish politicians of his generation, and he is sometimes referred to as "the best Prime Minister Denmark never had".