The party came to power in the legislative assembly of the state in 1977. MG Ramachandran became the Chief Minister. In 1979, AIADMK became the first Dravidian and non-congress party which was part of the Union Cabinet. Congress as a result of their deformed relationship with AIADMK, lined up with the DMK and the alliance from the state won 37 out of 39 parliamentary seats. Prime Minister Indira Gandhi's government dismissed a number of state governments including Dr.M.G.Ramachandran's government as it belonged to the opposition parties. But in the election of the state legislature held in 1980, AIADMK won a prosperous majority in the state assembly by winning 129 seats out of 234. For the second time, MGR was sworn in as chief minister of the state.
Even after MGR's ill health, the party won the state elections in alliance with the Congress. But the demise of MG Ramachandran in 1987, led MGR's wife Janaki Ramachandran to ascend to the party's leadership and lead the government as the state's first woman chief minister. She remained in the position until the state assembly was suspended and President's rule was enforced. After the charismatic personality of MGR, there was nobody left to unite the party. All India Anna Dravida Munnetra Kazhagam broke into two factions-one under Janaki Ramachandran, and the other under J. Jayalalithaa, a former film star, and associate of MGR. In 1988, the sects led by Jayalalitha and Janaki merged under Jayalalitha's leadership. But the state elections held in the year 1989 was won by DMK under the leadership of Karunanidhi.
In 1990, the central government led by Prime Minister Chandrasekhar dismissed the DMK government. In 1991, state elections were held again and this time the AIADMK swept to power. In the next elections in 1996, DMK won their power back and they held it till 2001. However in the 2001 elections, Jayalalitha regained power back. In her second term as chief minister, Jayalalitha took charge of the economic reforms and adopted many widely popular and wise decisions like, banning of lottery tickets, restricting the liquor and sand quarrying business to government agencies and banning of tobacco product sales. She also took ruthless actions against gangsters, trouble makers and striking government employees.
In October 2004 under her instruction, a special task force was sent to the Satyamangalam forests to hunt down infamous sandalwood smuggler Veerappan; the operation was successful. But in the 2004 elections, the party lost all the seats in the Parliamentary elections to the opposition coalition constituting of all major opposition parties in the state.