Between 1932 and 1937, Dillon served as a TD for the Donegal constituency for the National Centre Party and after its merger with Cumann na nGaedheal, for the new party of Fine Gael. Dillon played a key role in instigating the creation of Fine Gael and would become a key member of the party in later years. He remained as TD for Monaghan from 1937 to 1969. Dillon became deputy leader of Fine Gael under W. T. Cosgrave.
