Galbraith was active in Democratic Party politics, serving in the administrations of Franklin D. Roosevelt, Harry S. Truman, John F. Kennedy, and Lyndon B. Johnson. He served as United States Ambassador to India under the Kennedy administration.
After leaving the American embassy in India, Galbraith continued to advise Johnson, now president, against escalating American involvement in Vietnam. In 1965, he advised Johnson that he should "instruct officials and spokesmen to stop saying the future of mankind, the United States, and human liberty is being decided in Vietnam."
Galbraith served as a deputy head of the Office of Price Administration during World War II in 1941–1943. He was one of the few to receive both the World War II Medal of Freedom (1946) and the Presidential Medal of Freedom (2000) for his public service and contributions to science.
Galbraith served as an editor of Fortune magazine from 1943 until 1948. In 1949, he was appointed professor of economics at Harvard. He also served in the Truman administration as director of the Office of Economic Security Policy in 1946.
In May 1961, when Vice President Lyndon Johnson visited India, Galbraith had the duty of escorting him around various sites in India and attempting to explain some of his Texas mannerisms. After Vice President Hubert Humphrey won the Democratic nomination in 1968, Galbraith reluctantly endorsed Humphrey as preferable to the Republican candidate, Richard Nixon.