While the Fairbanks attorney had not applied for the position, Seaton was still impressed by him. President Dwight Eisenhower nominated Stepovich for the position on May 9, 1957 and he took office on June 5 as the territory's first native-born governor. Much of the new governor's term was spent lobbying for Alaskan statehood. In this effort he traveled widely through the Continental United States speaking and giving interviews on behalf of the territory. His efforts even included a January 19, 1958 appearance on the game show "What's My Line?" President Eisenhower signed the Alaskan Statehood Bill on July 7, 1958. Following this event, Stepovich issued a proclamation setting the dates for primary and general elections to determine officeholders for the new state. The Territorial Governor then resigned on August 1, 1958 to run for a seat in the United States Senate. Following his departure, Territorial Secretary Waino Edward Hendrickson succeeded as Acting Governor. Stepovich's bid for a United States Senate seat was unsuccessful. He was defeated by Ernest Gruening in the November 25, 1958 election, held just before Alaska became a state on January 3, 1959. In 1960, Stepovich campaigned against a ballot initiative to move the state capital from Juneau, Alaska to Anchorage, Alaska. Stepovich ran for governor of Alaska in 1962, but was defeated by incumbent William A. Egan by a narrow margin. Stepovich lost to Wally Hickel in the Republican primary for governor in 1966. This was his final campaign for office. Following his unsuccessful Senate run, Stepovich returned to his legal practice in Fairbanks. He remained there until 1978 when he and his wife relocated to Medford, Oregon. Despite the move, the former governor still maintained his legal residence in Fairbanks. Stepovich married Matilda Baricevic in November 1947. The couple had 13 children. His daughter Nada married NBA player John Stockton. His niece is actress and playwright Nicole Burdette. On November 25, 2003, Stepovich's wife, Matilda, died. Stepovich was granted an honorary doctorate by the University of Alaska Fairbanks on May 10, 2009. While visiting his son in San Diego, California, Stepovich suffered a head injury as result of a fall. He died on February 14, 2014 after spending six days in a hospital. Stepovich's body was returned to Fairbanks, Alaska. A memorial service was held for him at Sacred Heart Cathedral on February 28, 2014 followed by burial at Birch Hill Cemetery.