Although Simitis undertook many posts in every Papandreou government, he remained a largely unpublicized and silent figure. Yet, he was critical of his leader's fervent style and excessively populist policies. Simitis was opposed to Papandreou's anti-European Union (EU) and anti-American rhetoric. He favored a modernization of PASOK and espoused more moderate policies in foreign affairs. His resignation in September 1995 from the Papandreou government, over economic policy differences, increased his visibility as a leading anti-Papandreou dissident.
When Papandreou fell ill and was admitted to the hospital, Simitis and others within PASOK who had argued for changes within the party found a favorable environment for advancing their reformist vision. Although Papandreou was reluctant to relinquish power to this reformist wing, Simitis was elected by PASOK deputies as party leader and prime minister on 22 January 1996. He defeated acting Prime Minister Akis Tsokhatzopoulos in the second round of voting at the party convention. He also eliminated his other rivals, defense minister Gerosimos Arsenis and former deputy prime minister Yannis Haralambopoulos. Simitis retained his position through the 2000 elections.