Etheridge had rejoined the Republican Party by 1876, when he endorsed Rutherford B. Hayes for president. He ran on the Republican ticket for state senator, but was defeated by the Democratic candidate, William A. Milliken. In August 1878, the state Republican Party nominated Etheridge as its candidate for governor. His nomination was controversial, as one delegate recalled his attacks on the Republican Party in the late 1860s, and others pointed out that Etheridge's calls for repudiating the state debt ran counter to the party's platform. Etheridge subsequently declined the nomination. His replacement, Chattanooga mayor Eli Wight, was badly defeated in the general election.