Dasgupta taught at the London School of Economics (Lecturer 1971–1975; Reader 1975–1978; Professor of Economics 1978–1984) and moved to the University of Cambridge in January 1985 as Professor of Economics (and Professorial Fellow of St John's College), where he served as Chairman of the Faculty of Economics in 1997–2001. During 1989–92 he was on leave from the University of Cambridge and served as Professor of Economics, Professor of Philosophy, and Director of the Program in Ethics in Society at Stanford University. In October 1991 he returned to Cambridge, on leave from Stanford University, to re-assume his Chair at Cambridge. He resigned from Stanford in 1992 and has remained in Cambridge since then.