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In early 1977, Backlund joined Vincent J. McMahon’s World Wide Wrestling Federation. He was managed by “The Golden Boy” Arnold Skaaland. Less than 4 months into his WWWF run, Backlund received his first shot at the WWWF Championship, against "Superstar" Billy Graham. He lost by countout. Through 1977, Backlund received additional shots at the champion, and his fortunes started to change; the two went to a double countout in one match, then Backlund defeated Graham, but by countout (the title can only change hands via pinfall or submission). On February 20, 1978, at Madison Square Garden, Backlund finally scored a pinfall victory over Graham and won the title, despite Graham’s leg being on the rope during the pinfall.

He also challenged for the WWF World Tag Team Championship with Peter Maivia, but Maivia turned on and attacked him and Skaaland. This led the usually even-tempered Backlund to go berserk in the post-match interview, screaming to interviewer Vince McMahon that he was going to "kill him".

Three days after winning the WWWF Title, Backlund clashed with the NWA World Heavyweight Champion Harley Race in a rare “WWWF vs. NWA” title match. Both titles were on the line, but neither changed hands as the two fought to a 60-minute time limit draw. Defending against other champions became a recurring theme in Backlund’s run with the title. He faced the AWA World Heavyweight Champion (Nick Bockwinkel) and two NWA World Heavyweight Champions (Harley Race four times and Ric Flair once) in highly publicized matches. He engaged in a series of scientific matches against NWF World Champion Antonio Inoki. He defeated the Florida Champion Don Muraco. In 1982, he battled "International Champion" Billy Robinson to a 63-minute curfew draw in Montreal.

On August 9, 1980, Backlund teamed with Pedro Morales to capture the WWF World Tag Team Championship from The Wild Samoans at Showdown at Shea. Backlund and Morales were forced to vacate the title due to a then-extant WWF rule stating that no one can hold two championships at the same time. Backlund had more tag team success when he (along with Antonio Inoki) won the "1980 MSG Tag Team League Tournament", last defeating Hulk Hogan and Stan Hansen on December 10 in Osaka, Japan. Backlund and Inoki finished the tournament with seven wins and two double-countout decisions.&nbsp

It is claimed by some that when Backlund’s WWF Title was held up after a match in New York City against Greg Valentine on October 19, 1981, after a dazed referee "accidentally" gave the title belt to Valentine (storyline), it constituted an interruption of Backlund’s title reign. However, Backlund was billed as the WWF Champion in other cities in the days following the controversy. In the early part of the 1980s, when no promotion held nationally televised events, it was not uncommon practice to “hold up” the title in one area (to build interest in a rematch the "former" champion would win) while ignoring the situation in other parts of the territory. On November 23, Backlund pinned Valentine for the "Vacant in New York Only" WWF title.

After having been popular with the fans from early on, in the final months of his title reign fans had seemingly grown weary of "Howdy Doody" (as The Grand Wizard had dubbed Backlund). Vincent K. McMahon (who had bought the WWF from his father), wanted to put the title on the more charismatic and muscular Hulk Hogan. McMahon initially suggested Backlund turn heel and lose to Hogan but, when Backlund refused, a transitional champion became necessary between Backlund and Hogan. On December 26, 1983, Backlund (recently "injured" in a TV angle in which The Iron Sheik assaulted him with his Persian clubs) lost the title to The Iron Sheik. Backlund's manager, Arnold Skaaland, threw in the towel while Backlund was locked in the Camel Clutch. Because Backlund was declared "injured", he was denied an automatic rematch. Instead, Hulk Hogan was given a title shot, and became the new WWF Champion. Backlund continued to work for the WWF for a while after the title change, but did not receive another shot at the belt. On August 4, 1984, Backlund defeated Salvatore Bellomo in his last WWF match for 8 years.

In 1992, Backlund returned to the WWF. Backlund, whose persona remained the same as it was in his heyday, seemed to be out of step with the evolution of the WWF. Many fans did not remember him, as he had left just prior to Vince McMahon's national expansion. His initial period in the WWF was largely uneventful and he mainly wrestled mid-card matches. However, at the 1993 Royal Rumble, he lasted sixty-one minutes and ten seconds, a duration record that would not be broken until 2004 (by Chris Benoit). Backlund's first appearance at a WrestleMania event (WrestleMania IX) was a losing effort in a match with Razor Ramon.

On the July 28, 1994 episode of Superstars, Backlund wrestled what was billed as an "Old Generation vs. New Generation" match with Bret Hart, with Hart's WWF Championship on the line. Over the preceding weeks, the WWF aired vignettes of Backlund training for this match. Hart won the match, capitalizing after Backlund mistakenly believed he had won and helped Hart to his feet. Backlund "snapped" after Hart repeatedly tried to offer a sportsmanlike handshake following the match. He slapped Hart in the face and locked him in the crossface chickenwing submission hold, while screaming hysterically. After finally releasing the hold, Backlund stared at his hands in apparent shock. Backlund then started to regularly "snap" in similar fashion during his matches, viciously attacking his opponent with the crossface chickenwing and refusing to release it after the opponent submitted. He would then seemingly snap back to normal and appear horrified by what he had done.

On an episode of Monday Night Raw shortly after his match with Hart, Backlund claimed that he should still be considered the legitimate WWF Champion, as he had not been pinned by The Iron Sheik, nor submitted to the camel clutch. Backlund continued wrestling under the new gimmick of an out of touch and highly volatile eccentric, out to teach "The New Generation" a lesson. He dressed in business suits, had a hyperactive personality and used (and often misused) large words to try to sound superiorly intelligent. He demanded that he be addressed as Mr. Backlund. He would only sign autographs for wrestling fans if they could recite the names of all of the U.S. Presidents in chronological order. On several instances, he assaulted wrestlers and other WWF employees and placed them in the crossface chickenwing. These victims include Jim Ross, Duke "The Dumpster" Droese, WWF Magazine writer Lou Gianfriddo, and his former manager Arnold Skaaland, who he blamed for costing him the WWF Title in 1983.

On November 23, 1994, at the Survivor Series pay-per-view in San Antono, Texas, Backlund faced Bret Hart in a "Throw in the Towel" submission match for the WWF Championship. Bret's brother Owen Hart in Backlund's corner (carrying what Backlund claimed to be the same towel Skaaland threw into the ring in 1983) and Davey Boy Smith in Hart's. The object of the match was to place the opponent in a submission hold and make his cornerman throw in the towel. Late in the match, Smith chased Owen (who had interfered behind the referee's back to break a submission), but missed him and hit the ringside stairs head first. When Bret turned around to argue with his brother, Backlund took advantage and locked the crossface chickenwing on the champion. Hart fought the hold for an unprecedented eight-and-a-half minutes, but refused to give up. With Bulldog incapacitated, Owen, feigning concern for his brother, walked over to his parents (Stu and Helen) seated at ringside and pleaded with them to throw the towel in to save Bret from injury. He handed the towel to his mother. After several minutes (during which Stu Hart argued with Helen against Owen's plea, and ripped the towel from her hands), Helen Hart threw in the towel, giving the 35-minute match and the WWF Championship to Backlund.

Backlund's second reign as WWF Champion was a short one. He lost the title three days later to Diesel at a non-televised show in Madison Square Garden, the site of many of Backlund's victories in the 1970s and 1980s. This match is the shortest WWF Title match ever. Diesel kicked Backlund in the stomach, hit him with a Jackknife Powerbomb and pinned him in eight seconds. For weeks afterwards, fans jeered Backlund with chants of "Eight seconds! Eight seconds!" This match was the last time the WWF Championship changed hands at a non-televised event.

After the title loss, Backlund wrestled progressively less often, never again reaching main event status. One of his final WWF matches was an "I Quit" match against Bret Hart at WrestleMania XI on April 2, 1995. He lost, though he never actually said "I quit", instead screaming unintelligibly into the microphone, which special guest referee Roddy Piper seemed to interpret as "I quit."

Following WrestleMania, the WWF ran an angle in which Backlund declared his candidacy for President of the United States. Several vignettes aired, featuring Backlund preaching socially conservative values. One showed him campaigning at a beach. This angle was quietly dropped before it reached a conclusion.

From late 1996 to early 1997, Backlund joined forces with his old nemesis, The Iron Sheik, to manage The Sultan in the WWF.

He returned to the WWF in the 2000 Royal Rumble. After that, he briefly managed Intercontinental and European Champion Kurt Angle. He taught his crossface chickenwing submission hold to Angle. Later on, Angle fired Backlund and locked him in that move, after discovering Backlund had booked him in a two-fall Triple Threat match against Chris Benoit and Chris Jericho (with both of his titles on the line) at WrestleMania 2000.

On the 15th Anniversary episode of Raw on December 10, 2007, Backlund participated in the "15th Anniversary battle royal", along with 14 other wrestlers from Raw's 15 year history. Backlund was eliminated from the match by Skinner.

On the July 9, 2012 episode of WWE Raw, Backlund defeated Heath Slater. He later appeared at Raw 1000 with all of the other Legends who had faced Slater over prior weeks, helping chase Slater back into the ring when he tried to run away from Lita and the APA.

He was inducted into the WWE Hall of Fame on April 6, 2013 by his friend Maria Menounos, and was acknowledged onstage with the year's other inductees at WrestleMania 29.

He made an appearance on the October 7, 2013 episode of Raw, unsuccessfully attempting to canvass votes in order to become the special guest referee for the WWE Championship match at Hell in a Cell, Shawn Michaels later won a public vote and was named as the special guest referee. However, Backlund did appear in a segment at Hell in a Cell together with Darren Young and Titus O'Neil, where they played WWE 2K14. In April 2014, he started serving as an ambassador for the WWE.

On the May 5, 2015 episode of SmackDown, Darren Young was seen backstage with Backlund, where Young asked if Backlund would be his life coach and Backlund agreed to do so, vowing to "Make Darren Young Great Again". Over the next several months, Backlund would give Young advice in various vignettes, leading to the July 11 episode of Raw, where Young would win a battle royal to become the number one contender to the WWE Intercontinental Championship.