In 1981, Hossain was instrumental in orchestrating Sheikh Hasina's return to Bangladesh from her exile in India (Hasina and Sheikh Rehana could not return to the country since their family's murder in 1975). He contested the 1981 Bangladeshi presidential election as the Awami League's candidate. He lost to then incumbent Justice Abdus Sattar, who had been acting president after the assassination of Ziaur Rahman. Within a year of the election, Sattar was deposed by the military during the 1982 Bangladesh coup d'état. At the time of President Hussain Muhammad Ershad's downfall in 1990, Hossain played a leading role in drawing up the Three-Alliance Roadmap for the restoration of parliamentary democracy after 15 years of presidential government. He was also involved in making the then chief justice Shahabuddin Ahmed the head of the transitional government.