In 1967, he resigned as Governor of Jammu and Kashmir, and became the youngest-ever member of the Union Cabinet, holding the portfolios of Tourism and Civil Aviation between 1967 and 1973. Two years later, he voluntarily surrendered his privy purse, which he had been entitled to since the death of his father in 1961. He placed the entire sum into a charitable trust named after his parents. In 1971, he was sent as an envoy to the Eastern Bloc nations to explain India's position with regard to East Pakistan, then engaged in civil war with West Pakistan. He attempted to resign following an aircraft crash in 1973, but the resignation was not accepted. The same year, he became the Minister for Health and Family planning, serving in this post until 1977.
From 1967 to 1984 Karan Singh was a member of the Lok Sabha. In 1984, he contested the Lok Sabha polls as an independent candidate from Jammu but lost the election. He was a member of the Rajya Sabha from 30 November 1996 to 12 August 1999, representing National Conference, a Muslim dominated party active in Jammu and Kashmir. Later, he was a Rajya Sabha member from 28 January 2000 to 27 January 2018 representing INC. He is known for switching his loyalties from one political party to another quite frequently. He has served as Chancellor of Banaras Hindu University, Jammu and Kashmir University, Jawaharlal Nehru University, and NIIT University.