In the gubernotorial election of 2000, Martz defeated her democratic opponent, Mark O'Keefe 51%-48%.
Martz declined to campaign for reelection in 2004 while still serving her first term. With in weeks of taking office Martz declared she would proudly "serve as the lapdog of industry." Several weeks later she told the attendees of a women's conference that she had never been abused by her husband, because, "I’ve never given him any reason to hit me either." More seriously, Martz took fire in the media after a fatal drunk driving accident that killed House Majority Leader Paul Sliter. Martz's most trusted aid, Shane Hedges, was the driver, and was charged with negligent homicide. That night Hedges went to the governor's mansion where Martz allowed him to stay and even washed his bloody clothing. On a lighter note, more recently Martz made it into the news, through no action of her own, because of a supposed similarity to the face and hair of one nude bordello dancer sculpted by Seattle artist Kristine Veith, and placed in a new development in downtown Helena. Both Martz and Veith deny the similarity, with Martz reporting, "I'm a very modest person, no one would ever see me like that. My husband doesn't ever see me like that."