Davignon joined the Belgian Foreign Ministry in 1959 and became head of staff of Paul-Henri Spaak, then Minister of Foreign Affairs where he remained until 1965.In 1970, he chaired the committee of experts which produced the Davignon report on foreign policy for Europe and from 1974 to 1977, he then became the first head of the International Energy Agency. Later, he became a member of the European Commission, of which he was vice-president from 1981 till 1985. From 1989 to 2001, he was chairman of the Belgian holding company Société Générale de Belgique. He is now Vice Chairman of Suez subsidiary, Suez-Tractebel.
Davignon is a crucial member of the Strategic Advisory Panel of The European Business Awards. He is a member of the Cercle Gaulois and a member of the Advisory Board of the Itinera Institute think tank and is also President of the Brussels-based think tank Friends of Europe. On 26 January 2004, Davignon was given the honorary title of Minister of State, giving him a seat on the Crown Council.