Duhalde worked as a pool lifeguard before embarking on his political career. He met Hilda González at the pool in 1970 and they married the following year. They have five sons and seven grandsons. They live in a country house in San Vicente, Buenos Aires, named "Don Tomás" after Duhalde's father. The house had been donated for the creation of a foster care center which was never built, and was reclaimed by Duhalde. The rebuilt site includes a large grove, a pool, a tennis field, and an artificial lake.
Democratic rule was restored in 1983, and Duhalde ran for mayor of Lomas de Zamora. Being a centrist, the PJ appointed him candidate as a compromise between the internal opposing factions. The elections ended in a technical tie with the candidate of the Radical Civic Union (UCR), Horacio Devoy; Duhalde won by just 700 votes. There was a tie in the elections for the local legislature as well, as both the PJ and UCR got eleven legislators. Duhalde reported that a colonel sought his support for a possible coup against the newly elected President Raúl Alfonsín. Duhalde refused and reported directly to Alfonsín himself. He was elected national deputy in 1987, and became vice President of the Argentine Chamber of Deputies. He established a commission to fight drug addiction during his term of office.
The PJ held primary elections for the 1989 presidential elections between Carlos Menem, governor of La Rioja, and Antonio Cafiero, governor of the Buenos Aires Province. Menem won these elections, with Duhalde as candidate for the vice presidency under his ticket, and then won the general elections. Duhalde did not like the legislative work, and preferred to work with the actual administration of a district. Menem suggested that he run for governor of the populous Buenos Aires Province, which Duhalde accepted on the condition of a great budget aid to the province. This proposal was supported in Congress by Alfonsín, which led to a steady alliance between both politicians. Duhalde was elected governor, ending the political influence of Cafiero.
Duhalde resigned as vice President and was elected Governor of Buenos Aires Province in 1991, and re-elected in 1995. He ran for President in 1999, being defeated by Fernando de la Rúa. De la Rúa resigned during the December 2001 riots, and Congress appointed the governor of San Luis Province Adolfo Rodríguez Saá as President. When Rodríguez Saá also resigned, Congress appointed Duhalde. During Duhalde's term in office, a huge currency devaluation and an increase of the exchange rate led to a gradual recovery. He successfully supported the obscure candidate Néstor Kirchner against Menem, who sought a new presidential term. Duhalde had political disputes with Kirchner in later years, and is largely retired from politics since his defeat in the 2011 presidential elections.
Duhalde intended to run for the presidency in 1995, after Menem's term in office. Menem promoted the 1994 amendment of the Argentine Constitution, which allowed him to run for a second presidential term. Unable to defeat Menem in the primary elections, Duhalde promoted an amendment of the provincial constitution, to allow reelection as well. The PJ could not secure the majority of the constituent chamber, and the three opposing parties (the UCR, the Broad Front and the MODIN) joined forces in a "triple alliance" to prevent the sanction of the re-election. Eventually, the MODIN changed sides and supported the re-election, on the condition that a provincial referendum approved it. The referendum allowed the re-election of Duhalde, who won the main elections as well. Menem was also re-elected in the 1995 general elections. Duhalde increased his criticism of Menem, stating that he should leave the neoliberal policies and head a government closer to the Peronist doctrines.
As the new constitution allowed re-election a single time, the PJ started an internal discussion over the leadership of the party after the presidency of Menem. Duhalde announced his intentions to run for President in 1999 shortly after the 1995 elections, leading to a fierce dispute with Menem. The President promoted an advertisement campaign "Menem '99", despite of the term limit, to avoid being considered a lame duck. He also encouraged the governor of Tucumán, Palito Ortega, to run for the presidency as well. The political image of Duhalde was tarnished by a number of scandals that took place, and issues revealed by investigative journalists. Some of the scandals were related to the national government, such as the scandal over Argentine arms sales to Ecuador and Croatia, and harmed the reputation of the entire PJ. Other scandals involved Duhalde more directly, such as the corruption cases in the Buenos Aires provincial police and the murder of the news Photographer José Luis Cabezas. The PJ lost the 1997 midterm elections, and Menem renewed the "Menem '99" campaign. Eventually, the Supreme Court ruled that his attempt to run for another presidential term was unconstitutional. Ortega run for vice President under Duhalde's ticket, but Duhalde was defeated by the radical Fernando de la Rúa.
De la Rúa headed the country during an economic crisis, and resigned during the December 2001 riots. As his vice President had already resigned months before, Congress was convened to appoint a new President. Eleven provinces with low populations and Peronist governors had formed a bloc, the "Federal Front", and received the required votes to appoint the governor of San Luis Province, Adolfo Rodríguez Saá. The first administrative actions of Rodríguez Saá caused renewed protests, and the PJ did not fully support him. He called for a meeting with governors in Chapadmalal, but only six governors out of twenty-three attended. He resigned a few days later, and accused Duhalde of plotting against him, along with the governor of Córdoba, José Manuel de la Sota.
The financial operations made in dollars were subject to a strong currency substitution to pesos, the "pesification". There were disputes over the exchange rate of such substitution, as the current price of the dollar in the open market would force most firms and individual debtor to bankruptcy. The initial policy was to make 1 to 1 substitutions to the operations below 100,000 dollars. Another conflict was the corralito, imposed by De la Rúa, which attempted to stop the bank run by forbidding the withdrawal of money from bank accounts. Duhalde promised in his oath of office speech that "The one who deposited dollars will receive dollars". The minister of economy Jorge Remes Lenicov pointed out that that would be impossible, as the amount of dollars required was higher than even the foreign-exchange reserves of the Central Bank. Duhalde acknowledged two weeks later that he was mistaken. The bank accounts in dollars would be "pesified" at a 1.4 exchange rate, and the state financed the banks for the different rates with other operations. The taxes of public services were "pesified" and fixed at their current values. Most industries benefited from the "pesification" and the devaluation, as they could now export at higher prices, and the economy started to improve. The jump in the international price of soybean in July 2002 also proved highly beneficial. The devaluation also increased the price of imported products, which allowed import substitution industrialization. As the local prices became cheap in dollars, international tourism to the country was increased. The national state absorbed the debts of the provinces and the bonds used as alternative currency, on the condition that they transferred the power to issue bonds.
Duhalde was succeeded by Néstor Kirchner on May 25, 2003. Kirchner soon distanced himself from Duhalde, and removed all the people close to Duhalde from the government to reduce his political influence. Kirchner also sought supporters from all the social and political spectra to counter the influence of Duhalde within the party. However, both men delayed an open dispute and stuck together during the 2003 legislative elections, held in October. The dispute continued in the 2005 midterm elections. Without consensus in the PJ for a single candidate for senator of the Buenos Aires province, both Leaders had their respective wives run for the office: Hilda González de Duhalde for the PJ, and Cristina Fernández de Kirchner for the Front for Victory, which was kept by the Kirchners. Cristina Kirchner won those elections.
On December 23, 2009, Duhalde announced his intention to run for the presidency in the 2011 presidential elections. Néstor Kirchner had been succeeded by Cristina Kirchner in the presidency, staying as a highly influential figure, and it was still unclear which of the Kirchners would run in 2011. Many mayors of the Buenos Aires province were unsure whether to support Duhalde or the Kirchners. Duhalde organized the Federal Peronism faction, with members of the PJ opposing the Kirchners. Néstor Kirchner died in October 2010; the subsequent state funeral halted the campaign for a few months.
Duhalde has largely retired from politics since his defeat in the 2011 elections. He sought to make amends with Menem for their past political rivalry, and met him during the 2013 Papal inauguration of Pope Francis. They had a private meeting at Menem's house, and Menem reported that they were on peaceful terms. They had previously met in similar circumstances in 2005, during the funeral of Pope John Paul II.