Lauder started to work for the Estée Lauder Company in 1964. In 1984, he became a Deputy Assistant Secretary of Defense for European and NATO policy at the United States Department of Defense.
In 1986, Ronald Reagan named him as the United States Ambassador to Austria, a position he held until 1987. As ambassador, he fired diplomatic officer Felix Bloch, who later became known in connection with the Robert Hanssen espionage case.
In 1987, Lauder established the Ronald S. Lauder Foundation, a philanthropic organization that is dedicated to rebuilding Jewish life in Central and Eastern Europe. The foundation also supports student exchange programs between New York and various capitals in Central and Eastern Europe.
As a Republican, he made a bid to become the mayor of New York City in 1989, losing to Rudy Giuliani in the Republican primary. Michael Massing, writing of this nomination race, notes that politically Lauder 'seemed out of step with most American Jews; ... he ran to the right of Rudolph Giuliani. And, on Israeli issues, he was a vocal supporter of the Likud party, with long-standing ties to Benjamin Netanyahu."
Lauder led a movement to introduce term limits in the New York City Council, which were subsequently imposed on most NYC elected officials, including the Mayor and City Council, after a citywide referendum in 1993. In 1996, voters turned down a council proposal to extend term limits. Lauder spent $4 million on the two referendums. He has been involved in environmental conservation efforts in eastern Long Island and has served on the board of Directors of the conservation organization Group for the East End since 2002.
Lauder has been instrumental in a number of cases in recovering "lost" art from the Nazi period. He has been criticized for failure to resolve a case involving the Museum of Modern Art (MoMA), which in 1997 exhibited some paintings owned by Rudolph Leopold, a Viennese Doctor and art collector. An investigative article in The New York Times on December 24, 1997 – "A Singular Passion for Amassing Art, One Way or Another" – outlined a case involving Portrait of Wally by Egon Schiele, which was in the MoMA exhibition but was obtained by Leopold soon after the Nazi era. The New York County District Attorney (Manhattan) stepped in to help restore the piece to descendants of its original owner, but ownership of the painting is still in contention, nearly ten years later. Lauder has been accused of a failure to act on the case, despite being MoMA chairman at the time.
In 1998, Lauder co-founded the Alzheimer's Drug Discovery Foundation with his brother, Leonard A. Lauder. Its mission it to "rapidly accelerate the discovery of drugs to prevent, treat and cure Alzheimer's disease." Ronald continues as the Foundation's co-chairman.
On November 16, 2001, Lauder opened the Neue Galerie in New York, an art museum across the street from the Metropolitan Museum of Art. The Neue Galerie is dedicated to art from Germany and Austria from the early 20th century. It holds one of the best collections of works by Egon Schiele in the world.
On June 18, 2006, he purchased from Maria Altmann and her family, the painting Portrait of Adele Bloch-Bauer I by Gustav Klimt for $135 million, the highest price ever paid for a painting at that time. Lauder called the painting "Our Mona Lisa". He reportedly saw Klimt's portrait as a youth in Vienna and had admired it since. The painting, a Nazi-looted art piece which had just been restored to Altmann following years of negotiation and litigation with the Austrian government, now forms the centerpiece of the museum's collection.
A 2007 profile of Lauder in The New Yorker magazine detailed his residences, including three properties in Manhattan – a townhouse on East 70th Street, a townhouse (designed by Philip Johnson) on East 52nd Street, as well as an apartment at 740 Park Avenue. The profile additionally listed homes in Florida, London, Paris, and Wainscott, Long Island.
Lauder has been strongly critical of Business deals by European Energy firms with Iran and called for stronger UN sanctions because of Tehran's threat against Israel and its nuclear program. In April 2008, he criticized a visit by Swiss Foreign Minister Micheline Calmy-Rey to Tehran where she met with Iran's President Mahmoud Ahmadinejad to help a Swiss company secure a multibillion-dollar contract to buy natural gas from Iran. Lauder told a press conference in Bern: "Maybe that money that Switzerland is paying to Iran will some day be used to either buy weapons to kill Israelis, or buy weapons to kill Americans, or buy missiles to be able to deliver nuclear weapons." Lauder also led diplomatic efforts to persuade European businesses to withdraw from Iran. In January 2010, he warmly welcomed the announcement by Siemens CEO Peter Löscher that his company would not seek new Business in Iran.
In December 2009, Lauder protested against the Roman Curia's decree recognizing the heroic virtues of Pope Pius XII, asserting that an eventual beatification would be inopportune until the Holy See's historical archives from the 1939–1945 period were opened.
On November 3, 2011, The Second Authority for Television and Radio reached a decision on the issue in which it decided that the apology to Adelson broadcast by the channel was appropriate and that "no evidence has been presented that there was any intervention by the shareholders of Channel 10 on new content, or even on the text of the apology, which was agreed between the news company and the person injured by the broadcast".
Lauder has repeatedly come to the defense of Israel in public and is seen as an ally of Prime Minister Benjamin Netanyahu. In May 2012, he reacted "with dismay" at a suggestion by Ireland's Deputy Prime Minister and Foreign Minister Eamon Gilmore to impose a European Union-wide import ban on products made in Israeli settlements in the West Bank, which Gilmore said were "illegal" and made peace between Israel and the Palestinians "impossible". Lauder said: "Such boycott calls are cynical and hypocritical. Minister Gilmore is taking aim at the only liberal democracy in the Middle East while keeping quiet about those who really wreak havoc in the region: the Assads, Ahmadinejads and their allies Hezbollah and Hamas." He added that "the West Bank territories are legally disputed and not illegally occupied."
The Israelitische Kultusgemeinde Wien (Vienna Israelite Community) banned Lauder for allegedly interfering in its board elections. IKG President Oskar Deutsch alleged that Lauder had offered incentives to members of the IKG to support another candidate. A Lauder spokesman denied the allegations. In January 2013, it was reported that Deutsch and Lauder had resolved their dispute.
In 2018, OpenSecrets reported that Lauder had donated $1.1 Million to Secure America Now.