Rüütel has held numerous state positions since 1977, in both the legislative and executive branches of government. In 1983, when Estonia was still part of the USSR, he was elected chairman of the Presidium of the Supreme Council of the Estonian SSR (Soviet Socialist Republic). But by the mid-1980s he stood against the central authorities in Moscow, helping to prepare a document declaring Estonian sovereignty in 1988. In March 1990 Rüütel was again elected to the Supreme Council and made chairman. He participated in preparing a new resolution of sovereignty that this time declared the state power of the USSR in Estonia illegal. By May the Estonia Soviet Socialist Republic was no more; the new state had officially become the Republic of Estonia. Rüütel was chairman of its Supreme Council until October 1992. Rüütel also instigated the formation of the Council of Baltic States, headquartered in Tallinn, which presented a formidable united front in the Baltic States' struggle for independence. On 17 September 1991 the Republic of Estonia became a full member of the United Nations (UN) organization. Arnold Rüütel was head of state throughout the period of struggle for national independence and one of its chief architects.
In 1992 Rüütel was a candidate for president of the Republic of Estonia, but the position went to Meri in a runoff election after no candidate won a majority. Rüütel was elected a member of the Riigikogu in 1995 and then its Vice-Chairman. That same year he was elected leader of the delegation of the Baltic Assembly of Riigikogu and the chairman of the Presidium of the Baltic Assembly. Throughout this time he was chairman of the center-right Rural Party (later the Estonian National Association).