In 1985, following the death of Raymond McCullough, Donaldson was elected in a by-election to the Northern Ireland Assembly to represent South Down. In 1996 he was first placed candidate on the UUP list for the Forum elections, virtually guaranteeing him a seat. This led to his selection in 1997, for the Westminster Parliament where he was elected as a member of parliament (MP) for the Lagan Valley constituency. At that time he was tipped as a potential future leader of the Ulster Unionist Party.