McGuinness has acknowledged that he is a former IRA member but claims that he left the IRA in 1974.[8] He originally joined the Official IRA, unaware of the split at the December 1969 Army Convention, switching to the Provisional IRA soon after. By the start of 1972, at the age of 21, he was second-in-command of the IRA in Derry, a position he held at the time of Bloody Sunday, when 14 civil rights protesters were killed by British paratroopers in the city.[9]

During the Saville Inquiry into the events of that day, Paddy Ward claimed to have been the leader of the Fianna, the youth wing of the IRA at the time of Bloody Sunday. He claimed that McGuinness and another anonymous IRA member gave him bomb parts that morning. He said that his organisation intended to attack city-centre premises in Derry on the same day. In response, McGuinness said the claims were "fantasy", while Gerry O’Hara, a Derry Sinn Féin councillor, stated that he and not Ward was the Fianna leader at the time.[10]

The inquiry concluded that, although McGuinness was "engaged in paramilitary activity" at the time of Bloody Sunday and had probably been armed with a Thompson submachine gun, there was insufficient evidence to make any finding other than they were "sure that he did not engage in any activity that provided any of the soldiers with any justification for opening fire".[11]

McGuinness negotiated alongside Gerry Adams with the Secretary of State for Northern Ireland, Willie Whitelaw, in 1972.

In 1973, he was convicted by the Republic of Ireland's Special Criminal Court, after being caught with a car containing 250 lb (113 kg) of explosives and nearly 5,000 rounds of ammunition. He refused to recognise the court, and was sentenced to six months imprisonment. In court, he declared his membership of the Provisional IRA without equivocation: 'We have fought against the killing of our people... I am a member of Óglaigh na hÉireann and very, very proud of it'.[12]

After his release, and another conviction in the Republic for IRA membership, he became increasingly prominent in Sinn Féin, the political wing of the republican movement. He was in indirect contact with British intelligence during the hunger strikes in the early 1980s, and again in the early 1990s.[13] He was elected to the Northern Ireland Assembly at Stormont in 1982, representing Londonderry. He was the second candidate elected after John Hume. As with all elected members of Sinn Féin and the SDLP, he did not take up his seat.[14] On 9 December 1982, McGuinness, Gerry Adams and Danny Morrison were banned from entering Great Britain under the Prevention of Terrorism Act by William Whitelaw, by then Home Secretary .[15]

In August 1993, he was the subject of a two part special by The Cook Report, a Central TV investigative documentary series presented by Roger Cook. It accused him of continuing involvement in IRA activity, of attending an interrogation and of encouraging Frank Hegarty, an informer, to return to Derry from a safe house in England. Hegarty's mother Rose appeared on the programme to tell of telephone calls to McGuinness and of Hegarty's subsequent murder. McGuinness denied her account and denounced the programme saying "I have never been in the IRA. I don't have any sway over the IRA".[16]

In 2005, Michael McDowell, the Irish Tánaiste, claimed McGuinness, along with Gerry Adams and Martin Ferris, were members of the seven-man IRA Army Council.[17] McGuinness denied the claims, saying he was no longer an IRA member. Experienced "Troubles" journalist Peter Taylor presented further apparent evidence of McGuinness's role in the IRA in his documentary Age of Terror, shown in April 2008.[18] In his documentary, Taylor alleges that McGuinness was the head of the IRA's Northern Command and had advance knowledge of the IRA's 1987 Enniskillen bombing, which left 11 civilians dead.