A member of the Labour Party, Carr was elected Governor in 1996 after a ten-year career in the state legislature. He defeated Congressman Laurie Brereton and state Attorney General Gary Punch for the Labour nomination, then went on to defeat incumbent United Party Governor Nick Greiner, winning 57% of the vote.
In 2000, Carr was re-elected against Congresswoman Kerry Chikarovski, the first woman to run for Governor of Hunter from a major party.
Term limited, Carr kept a low profile during the primary season to decide his replacement. When little-known State Senator Morris Iemma won the nomination, Carr endorsed him ahead of the general election in December, though Iemma lost the election.