In 1997, he became leader of the Nova Scotia Liberal Party and premier of the province after John Savage was forced to resign due to discontent within his party and sagging polls. MacLellan tried to revive the Liberal government's fortunes; he narrowly won a minority government in the 1998 election, but his government was defeated in a confidence vote in 1999 and then defeated in the resulting 1999 election. On January 26, 2000, Maclellan announced he would step down as Liberal leader on June 30. He continued to sit as an MLA until resigning in October 2000.
Following his resignation, MacLellan returned to practising law, working for the Halifax-based law firm, Merrick Holm.