During his presidency, he faced one of the worst economic crises in Mexico's history, which started only weeks after taking office. While he distanced himself from his predecessor Carlos Salinas de Gortari, blaming his administration for the crisis, and overseeing the arrest of his brother Raúl Salinas de Gortari, he continued the neoliberal policies of his two predecessors. His administration was also marked by renewed clashes with the EZLN and the Popular Revolutionary Army; the controversial implementation of Fobaproa to rescue the national banking system; a political reform which allowed residents of the Federal District (Mexico City) to elect their own mayor; the privatization of national railways and its subsequent suspension of the passenger rail service; and the Aguas Blancas and Acteal massacres perpetrated by State forces.

Although Zedillo's policies eventually led to a relative economic recovery, popular discontent with seven decades of PRI rule led to the party losing, for the first time, its legislative majority in the 1997 midterm elections, and in the 2000 general election the right-wing opposition National Action Party's candidate Vicente Fox won the Presidency of the Republic, putting an end to 71 years of uninterrupted PRI rule. Zedillo's admission of the PRI's defeat and his peaceful handing of power to his successor improved his image in the final months of his administration, and he left office with an approval rating of 60%.