In 2005, Paisley's DUP became the largest unionist party in Northern Ireland, displacing the Ulster Unionist Party (UUP), which had dominated unionist politics since 1905 and had been an instrumental party in the Good Friday Agreement. In 2007, following the St Andrews Agreement, the DUP finally agreed to share power with republican party Sinn Féin and consent to all-Ireland governance in certain matters. Paisley and Sinn Féin's Martin McGuinness became First Minister and deputy First Minister respectively in May 2007. He stepped down as First Minister and DUP leader in mid-2008, and left politics in 2011. Paisley was made a life peer in 2010 as Baron Bannside.
Paisley married Eileen Cassells on 13 October 1956. They had five children, daughters Sharon, Rhonda and Cherith and twin sons, Kyle and Ian. Three of their children followed their father into politics or religion: Kyle is a Free Presbyterian minister; Ian is a DUP MP; and Rhonda, a retired DUP councillor. He had a brother, Harold, who is also an evangelical fundamentalist.