Simitis then led the party in the national elections of 22 September 1996, gaining a mandate in his own right. He also narrowly won the national election of 2000. Although he is widely respected throughout Europe, in Greece Simitis was regarded by some Greeks as a rather dull technocrat, lacking the charisma of Papandreou.

On 7 January 2004, with PASOK's popularity collapsing, Simitis announced that he would resign as party president and would not stand for re-election as Prime Minister in the forthcoming legislative elections. At the time he was accused of bowing out to avoid humiliation at the polls. However, by the end of his tenure on March 10, he would be in office for over 8 consecutive years, the longest continuous term in modern Greek history. In a past interview Simitis had already stated that he would remain prime minister for only two legislative periods, since "he wanted to do other things in his life as well". On 8 January he called elections for the position of party president to be held on 8 February. Simitis was succeeded as PASOK leader by then Minister of Foreign Affairs George Papandreou, the only candidate in these elections. Despite Papandreou's personal popularity, PASOK lost the March 7 elections to the conservative New Democracy party, whose leader Kostas Karamanlis succeeded Simitis in the office of Prime Minister.

Simitis is largely known in Greece for his political philosophy which is known as Eksynchronismos ("modernization") which focuses on extensive public investment and infrastructure works as well as economic and labor reforms. Simitis is credited by his supporters with overcoming chronic problems of the Greek economy and thus achieving the admittance of Greece into the Eurozone. (One sees, in retrospect, that these problems were never really overcome, but rather hidden by Greece's partners through expert economic manipulation. And once the governments lacking the concealing finess came to power, these pre-existing problems resurfaced. The situtation became even worse due to common European monetary policies that the Greek economy was too weak and problematic to be able to abide by unscathed.) During the period of his governance, official data presented inflation as having decreased from 15% to 3%, public deficits diminished from 14% to 3%, GDP increasing at an annual average of 4% and factual labor incomes having increased at a rate of 3% per year. However, the macroeconomic data presented by Simitis' government were called into question by an audit performed by the successor government of New Democracy in 2004. Eurostat concluded in 2006 that the public deficit of the Greek economy amounted to 6,1% in 2003, more than double the percentage presented by Simitis' government. The results of the audit concluded that the PASOK administration used different accounting methods, especially for calculating the military expenses during its term. The government of New Democracy used the revised data as a means to criticize the previous government for incompetent economic policy and a falsification of an economic indicator, namely the public deficit, which among other criteria was used as a basis on which Greece was accepted into the Eurozone. PASOK contested the accusations and claimed that 2006 Eurostat changes to the system of defense expenditure calculation legitimized the practices of the Simitis government. New Democracy responded that the defense expenditures covered by those changes constituted only a small part of much more substantial expenditures that were fraudulently concealed by the PASOK government. Whether Simitis' government conducted any unconventional handling of Greek fiscal data continues to be a hotly contested issue between the two political parties. (It is true, however, that despite the New Democracy's accusations and the mishandlings of the Simitis' government, the subsequent New Democracy government under the incompetent Prime Minister Karamanlis and the, perhaps even more incompetent, Economy Minister George Alogoskoufis, fared even worse. The new Prime Minister George Papandreou had to assume the responsibility of the serious clean-up of his predecessors' mess, with, fortunately, generous backing and support from Greece's European and world partners.)

A major issue during Simitis' tenure concerned corruption, which has become endemic in Greek public life. Simitis rejected New Democracy's bills for accountability and transparency with regards to governmental expenditure and decisions, and New Democracy leader Kostas Karamanlis accused Simitis during a parliamentary plenum of being an "archpriest of cronyism", referencing the index of the NGO Transparency International. However, Greece's position has fallen by 5 places in the same index during the New Democracy government. Four years later Karamanlis himself admitted that he exagarated and that he never doubted Simitis' honesty.

Many large-scale infrastructure projects were carried out or begun during the so-called 'era of Eksychronismos', such as the new "Eleftherios Venizelos" Athens International Airport, the Rio - Antirio bridge, the Athens Metro, or the Egnatia Odos.

In 1996, the appointment of the PASOK leaning "To Vima" newspaper editor, Stavros Psycharis, as political administrator of Mount Athos was particularly criticised by the opposition. In 2000, Simitis was embroiled in a dispute with the Archbishop of the influential Greek Orthodox Church, Christodoulos, when the Greek government sought to remove the "Religion" field from the national ID cards carried by Greek citizens on the grounds that the Hellenic Data Protection Authority (HDPA) recommended so; its decision also included the "Nationality" field, but was not implemented following a subsequent EE directive to the contrary. Christodoulos opposed the decision, claiming that the action pursued deviously the religious de-identification of the Greek nation. Faced by the government's robust but unpopular stance, he organised two massive demonstrations in Athens and Thessaloniki, alongside a majority of bishops of the Church of Greece. The attitude of Simitis gained faint-hearted support even within his party, but found a surprisingly militant ally in the small Left Coalition party echoing the Eksychronismos opinion makers. The then opposition leader signed a petition, organized by the Church of Greece, calling for a referendum on the matter and signed, too, by more than three million citizens. However, the inclusion of religious beliefs on ID cards, even on a voluntary basis, as the Church had asked, was subsequently subsided, with its supporters' contribution, to appease extra tensions in the country.

While PASOK traditionalists disliked his move away from more orthodox norms of Democratic socialism, and also his relative moderation on issues such as the Cyprus dispute and the Macedonia naming dispute, his supporters saw both of these as positive elements of the eksynchronismos movement that Simitis was seen as spearheading.

During January – June 2003, Simitis, as Greek Prime Minister, exercised the presidency of the European Council.