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In August 2012, announced that he was leaving the Knesset and joining the Israeli cabinet to replace Home Front Defense Minister Matan Vilnai, who resigned to become Israel's ambassador to China. Dichter was replaced by Kadima's Ahmed Dabbah.

In November 2012, during Operation Pillar of Defense, Dichter said: "We have no other choice; Israel must perform a reformatting of Gaza, and rearrange it, as we did in Judea and Samaria during Operation Defensive Shield." Dichter's call has been echoed in the Israeli press, but bashed by critics of Israel's policy. In a Russia Today article, this was paraphrased as a call to "wipe [Gaza] clean with bombs." In his 2014 poem "The Children of Gaza & the Profits from their Genocide", English poet Heathcote Williams took this paraphrase literally.

Dichter featured in the 2012 documentary film The Gatekeepers and discussed the main events of his tenure in Shin Bet.

On 3 August 2011, Dichter and 39 other Knesset members signed the proposed Basic Law proposal: Israel as the Nation-State of the Jewish People.

After Ehud Olmert resigned as party leader, Dichter entered the leadership election. However, he came fourth with only 6.5% of the vote. He retained his seat in the 2009 elections after being placed ninth on the party's list, but lost his cabinet portfolio as the Likud-led coalition formed the government.

In Matar v. Dichter, the Center for Constitutional Rights filed a federal class action lawsuit against Dichter on behalf of the Palestinians killed or injured in a 2002 "targeted killing" air strike in Gaza. It charged him with extrajudicial killing, war crimes and other gross human rights violations. On 16 April 2009, the United States Court of Appeals for the Second Circuit dismissed the case citing Dichter's immunity under the Foreign Sovereign Immunities Act (FSIA).

In March 2009, Dichter banned a series of Palestinian Authority-sponsored events billed as the 2009 Arab Capital of Culture planned for Jerusalem, Nazareth and other parts of the country. Dichter said they violated the Israeli–Palestinian treaty barring PA events on Israel territory. Nazareth Mayor Ramiz Jeraisi criticized the move as anti-Arab. Eight events were cancelled and twenty organizers and participants were detained.

As Minister of Public Security, Dichter made several reforms in the fields under the auspices of the ministry. These included budgetary and organizational reform, the building of a Witness Protection Program, and the formation of a national crime fighting unit (Lahav 433) similar to the United States' FBI. In 2007, Dichter canceled a trip to the UK over concerns that he would be arrested for war crimes.

In September 2005, Dichter left office and became a research fellow at the Brookings Institution in Washington, D.C. Several months later, he returned to Israel and announced his foray into politics with the newly established Kadima. He was elected to the Knesset on the party's list in 2006, and on May 4 that year was sworn in as the Minister of Internal Security. In this role, he oversaw Israel's law enforcement system including Israel's Police Force and Prison Service.

Dichter began his career in Shin Bet as a sky marshal for El Al. After becoming proficient in Arabic and completing field intelligence courses, he began working in the Shin Bet's Southern District, specifically the Gaza Strip. In 1992, he was appointed director for the region. Aiming to improve the Shin Bet's protection capabilities, Dichter was appointed Director of the Security and Protection Division. In 1999, he became Deputy Director of Shin Bet. In 2000, he was promoted to director.

Avraham (Avi) Dichter was born in Ashkelon. His parents were Holocaust survivors. As an adolescent, he joined the Hashomer Hatzair youth movement. After graduating high school, he served in an elite unit of the Israel Defense Forces, Sayeret Matkal, under then Commander Ehud Barak. Upon completing his military service, Dichter joined Shin Bet, Israel's internal security service. In 1986, he earned a BA in Social Science from Bar-Ilan University. He also has an MBA from Tel Aviv University.

In 1973, he married Ilana Wallerstein, a teacher and artist who he had met in high school. They have three children.

Avi Dichter (Hebrew: אָבִי דִּיכְטֶר , IPA: [ˈavi ˈdiχteʁ] ; born 14 December 1952) is an Israeli politician and the current Chairman of the Foreign Affairs and Defense Committee. A former Minister of Internal Security and Shin Bet director, he resigned from the Knesset and left Kadima in August 2012 in order to become Minister of Home Front Defense, a position he vacated in March 2013.