In 1977 the Administration and Congress acted to further consolidate federal energy policy, R&D, and nuclear energy defense functions. ERDA was integrated with the Federal Energy Administration and other federal energy functions to create a Cabinet-level U.S. Department of Energy. The governmental elements brought together to form DOE included the Federal Energy Regulatory Commission; the Economic Regulatory Administration; the automotive research and development sections of the Environmental Protection Agency; Solar Research and Development from the National Science Foundation; and Fossil Energy and Development from the Department of the Interior's Office of Coal Research, as well as several Power Administrations.

Chicago Operations's role under the new Department also continued to evolve. Parts of the Federal Energy Administraion responsible for energy conservation grants to the states were merged with Chicago Operations. The office was also given expanded responsibilities for new DOE research facilities, additional nuclear waste program assignments and new procurements aimed at broadening industrial participation in DOE programs.

On April 1, 2004, the Chicago Operations Office became the Chicago Office as part of the reorganization of the Office of Science.

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