In 1978, Sharp was elected to the Texas House of Representatives from the 40th District in Victoria and was later named "Outstanding Freshman" by "Texas Monthly". Just a few weeks after his re-election for a third full two-year term in the general election of 1982, he ran and won a special election runoff and served a full four-year term in the Texas Senate. He was appointed to the powerful Senate Finance Committee. In 1986, he was elected to the Texas Railroad Commission. In that position, he worked to reform the state's trucking regulations, improve railroad safety, and develop new markets for Texas' abundant supply of clean-burning and efficient natural gas.