He gained national notoriety with his proposals to stop the emerging AIDS epidemic in the late 1980s, such as banning HIV-positive immigrants. He was the only prominent politician to support the LaRouche movement's Proposition 64 in 1986. Another California ballot initiative he backed, Proposition 102, would have mandated widespread testing, tracing of sexual partners by state authorities, and a mandatory quarantine of persons with AIDS. It failed by a considerable margin. He did succeed in pushing hospitals to notify post-1977 recipients of blood transfusions that they were at risk. In 1989 he published Shadow in the Land: Homosexuality in America, attacking the gay rights movement. In 1985, Dannemeyer advocated barring persons with AIDS from working in the healthcare industry, stating that there was already "a requirement that nurses who are AIDS victims not work in maternity [wards] because a person with AIDS emits a spore that has been known to cause birth defects." That stated, by 1994, he was open to the AIDS dissent movement and the views of UC Berkeley Professor Peter Duesberg and called for a full-scale Congressional investigation into the HIV = AIDS hypothesis.
