Menem, the son of Syrian immigrants, was born into the Muslim faith but converted to Roman Catholicism, the official religion of Argentina, to achieve his political aspirations. He joined the Peronist (Justicialist Party) movement in 1956 and was briefly imprisoned that year after participating in a revolt aimed at restoring Juan Perón (Perón, Juan) (who had been ousted from power) to the presidency. After obtaining a law degree from the National University of Córdoba in 1958, Menem began a career as a trade union lawyer in the northwestern city of La Rioja. He was elected governor of La Rioja province (La Rioja) in 1973 but was expelled from office in 1976 by the military junta that had overthrown the government of Isabel Perón (Perón, Isabel); he was held under house arrest until 1981.

After regaining the governorship of La Rioja in 1983, Menem expanded the size of government, gave favourable tax breaks to businesses, and pursued other policies typical of the Peronist movement. His support base among Peronists grew, and in May 1989, amid the worst economic crisis in the country's history, he was elected president of Argentina. High inflation forced Menem to abandon party orthodoxy in favour of a fiscally conservative, market-oriented economic policy. With the aid of many non-Peronist cabinet members, he succeeded in stabilizing the economy. Menem cultivated a flamboyant image and enjoyed great national popularity despite sharp criticism for pardoning convicted human rights violators connected with the period of military rule (1976–83). The Olivos Pact (1994), an agreement between Menem and the opposing Congressional party, allowed him to revise the constitution of 1853 to permit his reelection as president in 1995 (the pact also limited presidential terms to four years and imposed restrictions on executive control over certain branches of government).

During his second term, Menem sought to improve relations with Great Britain. His 1998 trip marked the first time an Argentine leader had visited Britain since the Falkland Islands War (1982). Menem and British Prime Minister Tony Blair (Blair, Tony) agreed to promote bilateral trade and investment. Menem's second term, however, was marked by internal feuding and corruption in the Peronist party. Barred constitutionally from running for a third consecutive term, Menem was succeeded by Fernando de la Rúa, the candidate of an alliance of opposition groups, in December 1999.

In June 2001 Menem was placed under house arrest on charges of involvement in an arms-smuggling conspiracy (selling illegal weapons to Ecuador and Croatia in the early 1990s), but he was freed five months later. (His case was refiled in the early 2000s, and his trial began in October 2008.)

In 2002 Argentina faced enormous political, economic, and social chaos that forced de la Rúa's resignation, and Menem reentered the political arena seeking to regain the presidency. Factional fighting within the Justicialist Party led to a split, and Menem contested the 2003 presidential election against two other Justicialist candidates as well as candidates from other parties. In the first round of voting, Menem led with one-fourth of the vote, finishing slightly ahead of Justicialist candidate Néstor Kirchner (Kirchner, Néstor) but failing to surpass the threshold necessary to win. Under pressure from many of his supporters who realized that he had little chance of defeating Kirchner, Menem withdrew prior to the runoff, and Kirchner was elected by default.