In 1922 Torp was a delegate at the Fourth Comintern Congress. In 1923 the revolutionary wing that had assumed power in the Labour Party in 1918 had split into two wings, one for and one against Comintern membership. Torp belonged to the latter wing, which assumed power at the 1923 national convention. Torp was elected chairman of the entire party. When he became chairman, the chairman of the party's youth wing (Peder Furubotn) was four years older than he was. Torp chaired the party until 1945. It has often been said, however, that Martin Tranmæl was the "real" chairman of the Labour Party.

Torp had been a member of Sarpsborg city council from 1919 to 1923 and deputy member of Aker municipal council from 1925 to 1928 when he in 1930 moved to Oslo. He served as mayor in 1935 and 1936, and was elected to the Parliament of Norway in the 1936 Norwegian parliamentary election. By that time he had already become acting Minister of Defence in Nygaardsvold's Cabinet, filling in for Fredrik Monsen who was ill. He was then Minister of Social Affairs from November 1936 to July 1939, and Minister of Finance from July 1939 to March 1942. In April 1940 Norway had been invaded by Nazi Germany, and Torp was responsible for initiating the successful flight of the Norwegian National Treasury. After overseeing the start of the flight, he fled together with the rest of Nygaardsvold's Cabinet. In Åndalsnes he was injured in the foot during the German air raids. The Cabinet ultimately reached Tromsø where they embarked for England, where they stayed until the war's end. Torp was acting Minister of Defence from November 1941 to February 1942, and then the permanent Minister of Defence from March 1942 to November 1945, in Nygaardsvold's and Gerhardsen's First Cabinet. Torp was a former antimilitarist, and was imprisoned for five months in 1924 as he called for a military strike, but shed this ideology from the mid-1930s.

Before the Second World War, Torp was also chairman of Bærumsbanen from 1935 to 1940, Oslo Sporveier from 1935 to 1940 and the Oslo airport committee from 1935 to 1940. He was a board member of Folketeaterbygningen from 1935 to 1940, Idrettskomiteen av 1935, and Felleskomiteen for forstadsbanene from 1935 to 1940. He was a deputy board member of Norges Kommunalbank from 1935 to 1940. All of these positions were lost when he fled the country.