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In February 2017, Donnelly announced that he was joining Fianna Fáil. Upon joining, Donnelly said that he believed Fianna Fáil to be "the best team that most closely align with my politics who I believe are taking these challenges very seriously". During a 2017 radio interview Donnelly was questioned about a previous newspaper column, in which, after paraphrasing an unnamed person about Fianna Fáil's perceived problems and "lack of accountability", Donnelly wrote that he "hate[d] it when the cynics are right". Donnelly initially said that he did not know where the host was quoting from - later stating: "I stand corrected". He was appointed party spokesperson for Brexit. In a Front-Bench reshuffle in March 2018 he was appointed Fianna Fáil spokesperson on Health. Donnelly was elected to the 33rd Dail in the 2020 Irish general election, although he won less votes than when he stood with the Social Democrats three years prior.

At first an Independent, he became co-founder and joint leader of the Social Democrats in 2015, and stood successfully for that party at the 2016 general election. He left the Social Democrats on 5 September 2016, and acted as an independent prior to joining Fianna Fáil in February 2017.

Stephen Donnelly entered political life being elected as an Independent TD at the 2011 general election. On 15 July 2015, Donnelly launched the Social Democrats, becoming co-leader along with former Labour Party TD Róisín Shortall and former Independent TD Catherine Murphy. Donnelly left the party on 5 September 2016, citing difficulty in working with his two co-leaders. After leaving the Social Democrats, Donnelly spent the next five months as an Independent TD again for Wicklow.

In October 2012, he addressed Martin Schulz, President of the European Parliament, in Dáil Éireann, on behalf of the technical group, saying: "€67 billion is being borrowed from the troika, virtually all of which is going into the banks and almost the same amount is being given by the banks to the senior bondholders in terms of forgone losses. This is what has happened: there has been a €67 billion circle of money from the troika through Ireland to the international banks and investors… I thank Mr. Schulz for his support and I hope he will be able to bring this simple message back: Ireland did not get a bailout and Ireland is not looking for aid or benevolence. We need our money back in order that we can contribute to the recovery of Europe."

Miriam Lord of The Irish Times made Donnelly her 2012 Politician of the Year, owing to his contributions on the post-2008 Irish banking crisis.

In 2008, he completed a master's degree in Public Administration in International Development at the Harvard Kennedy School of Government. He returned to work for McKinsey and Company, in Dublin, before deciding to run for office in 2011.

Donnelly is a graduate of University College Dublin (UCD) with a degree in mechanical engineering. He also worked and studied in the Massachusetts Institute of Technology (MIT). In 2000, Donnelly moved to London, where he worked as a management consultant with McKinsey & Company.

Stephen Donnelly (born 14 December 1975) is an Irish Fianna Fáil politician who has been a Teachta Dála (TD) for the Wicklow constituency since the 2011 general election.