Jefferson was appointed as the first Secretary of State by President George Washington. In this role, he was responsible for conducting foreign policy and managing diplomatic relations with other nations.

During his tenure, Jefferson clashed with Alexander Hamilton, the Secretary of the Treasury, over economic policy and the role of the federal government. Jefferson advocated for a strict interpretation of the Constitution and opposed Hamilton's plans for a national bank and federal assumption of state debts. This conflict led to the formation of the first political parties in the United States – the Federalists (led by Hamilton) and the Democratic-Republicans (led by Jefferson).

President Washington issued the Neutrality Proclamation, declaring the United States' neutrality in the conflict between France and Great Britain. Jefferson, while sympathetic to France, ultimately supported the proclamation. This decision reflected the pragmatic need to protect American interests and avoid entanglement in European wars.

Frustrated by the ongoing political battles with Hamilton and disagreements over policy, Jefferson resigned as Secretary of State. He retired to Monticello, where he continued to develop his political ideas and organize the Democratic-Republican Party. This marks a clear transition to active political opposition.