Velázquez ran for Congress in the 1992 election, seeking a seat in the New York's newly-drawn 12th congressional district, which was drawn as a majority-Hispanic district. Velázquez won the Democratic primary, defeating nine-term incumbent Stephen J. Solarz and four Hispanic candidates.
In 1992, Velázquez defeated incumbent congressman Stephen J. Solarz in the primary and was elected to the U.S. House of Representatives, representing New York's 12th congressional district, and became the first female Puerto Rican member of Congress. The sprawling 12th district encompasses parts of Brooklyn, Queens and Lower Manhattan. It includes such neighborhoods as Ridgewood, Maspeth, and Woodside in Queens; Bushwick, Williamsburg, Red Hook, and Sunset Park in Brooklyn; and part of Manhattan's Lower East Side. She also became the first Hispanic woman to serve as Ranking Democratic Member of the House Small Business Committee. The committee oversees federal programs and contracts totaling $200 billion annually. She also serves on the House Financial Services Committee.
In October 1992, during her first campaign for the House, an unknown person or persons at Saint Clare's Hospital in Manhattan anonymously faxed to the press Velázquez's hospital records which pertained to a suicide attempt in 1991. At a subsequent press conference, Velázquez acknowledged that she had attempted suicide that year while suffering from clinical depression. Velázquez said that she underwent counseling and "emerged stronger and more committed to public service." She expressed outrage at the leak of personal health records and asked the Manhattan District Attorney and the state Attorney General to investigate. Velázquez sued the hospital in 1994, alleging that the hospital had failed to protect her privacy. The lawsuit was settled in 1997.