After retiring from the FBI, Gunderson set up a private investigation firm, Ted L. Gunderson and Associates, in Santa Monica. In 1980, he became a defense investigator for Green Beret Jeffrey R. MacDonald, convicted of the 1970 murders of his pregnant wife and two daughters. Gunderson obtained affidavits from Helena Stoeckley confessing to her involvement in the murders. His tactics in obtaining the affidavits have been criticized. The courts have been unwilling to find Stoeckley's statements believable due to the following facts: that there is no physical evidence of Stoeckley or of the conspirators whom she has named at the crime scene; that she made numerous confessions and also statements of non-involvement; and that statements in her confessions are at odds with known facts (e.g., she named an individual who was in jail at the time of the murders as a fellow participant). Jeffery MacDonald's conviction stands and he remains imprisoned.

Stoeckley further stated in her confessions to Gunderson that a satanic cult she was involved in were responsible for the murders. This was the beginning of Gunderson's beliefs (and statements) concerning satanic cults involving government officials.

Gunderson believes that Satanic cults engage in widespread child kidnapping for the purpose of child sexual abuse and ritual murder, and that these activities involve high-ranking government officials and/or the Illuminati. He credits William Guy Carr's Pawns in the Game with opening his eyes to the plans of the Illuminati.

In 1982, Gunderson joined the search for missing child Johnny Gosch.

In 1990, Gunderson excavated the site of the McMartin Preschool, claiming to have uncovered secret tunnels.

Following the Oklahoma City bombing, Gunderson promoted Michael Riconosciuto's claims that the Alfred P. Murrah Federal Building was destroyed not by a truck bomb, but by a pineapple-sized "barometric bomb."

In 1996, Gunderson ran against House Republican John Ensign as the candidate of the Independent American Party (the Nevada affiliate of the Constitution Party). He garnered 2.65% of the vote, leading the third-party field.

In April 2008, Gunderson revealed his belief that Sonny Bono was murdered, rather than killed in a collision with a tree while sking. He claims that Bono was killed by government agents in order to prevent disclosure of government involvement in drug dealing.