Fergusson began holding office as a Community Councillor. He was elected as a member for the South of Scotland region of the Scottish Parliament 1999, and has been Member of the Scottish Parliament for Galloway and Upper Nithsdale since 2003. He says he entered politics mainly to champion rural causes in his own region: "I was particularly exercised by the fact that whenever anybody talked about rural Scotland, they seemed to talk about the Highlands and Islands. I come from the south of Scotland, and I was keen to provide a rural voice from the south of Scotland." During this time, Fergusson was lead spokesman for Agriculture and Forestry for the Conservative party, and Convener of the Rural Development Committee, including during the passage of the Protection of Wild Mammals Act 2002. As spokesman, he described laws banning entirely the docking of dogs' tails as "complete and utter folly", arguing that there was a significant difference between the cosmetic docking of entire tails and the shortening of the tails of working dogs. He gained a reputation as a passionate advocate on rural affairs, respected across parties for his political astuteness. He was also one of the biggest rebels from the Conservative whip in the second session of Parliament. After retaining his marginal seat at the 2007 election, with an increased majority of 3,333, on 14 May 2007 he was elected by his fellow MSPs to succeed George Reid as Presiding Officer by a large majority, beating the other candidate Margo MacDonald by 108 votes to 20. Because the position of Presiding Officer is an impartial one, the officeholder is required to remove himself from all party politics. Consequently, Fergusson resigned from the Conservative party. He indicated his intention to resign as Presiding Officer at the conclusion of his term, and stand for the Conservative party in 2011. On his return to the Parliament after the 2011 Election, Fergusson stepped down as Presiding Officer and returned to the Conservative benches. Fergusson announced in 2015 that he would not be seeking re-election in 2016 and would retire from politics after serving as MSP for 17 years. He was succeeded by Finlay Carson at the 2016 election. Fergusson was knighted in the 2016 Birthday Honours for services to politics, the Scottish parliamentary process and public life in Scotland.
Other duties
As Presiding Officer, he chaired the Scottish Parliamentary Corporate Body, which has similar functions to that of the House of Commons Commission, and the Parliamentary Bureau, which sets the daily business in the chamber and timetable for progress of bills, subject to approval by the Parliament. During the draw for the 2007–08CIS Cup semi-finals, Fergusson mixed up the numbers and miscalled the teams, a mistake that was rectified later that day.