Tired of CBS's constant reductions of his show, Keeshan left Captain Kangaroo when his contract with the network ended in December 1984, just nine months shy of the show's 30th anniversary. By 1987, repeats of the show were airing daily on many PBS stations.

Keeshan's show was given a farewell of sorts with Captain Kangaroo and Friends, a prime-time network TV special that aired in 1985.

After Captain Kangaroo ended, Keeshan hosted 1985's CBS Storybreak, which featured animated versions of children's literature. Keeshan appeared in framing sequences for the animated stories, showcasing the book versions and suggesting similar books for the viewers to seek out. In 1987, Keeshan founded Corporate Family Solutions with former Tennessee Republican Governor Lamar Alexander. The company provided day-care programs to businesses.

Keeshan lived on Melbury Road in Babylon Village, Long Island, New York before moving to spend the last 14 years of his life in Vermont, where he became a children's advocate as well as an author. His memoirs, entitled Good Morning, Captain, were published in 1995 by Fairview Press. He was a strong advocate against video game violence and took part in congressional hearings in 1993. In addition, he joined with parents groups in the 1980s who protested children's TV shows based on then present toys on the market, like He-Man and Transformers; he felt that toys turned into TV shows did not teach children anything about the real world. He also made a rare film appearance in The Stupids in 1996.

He later became an honorary member of Dartmouth College's Class of 1942.

Keeshan died in Windsor, Vermont, on January 23, 2004, at the age of 76. He was survived by three children. His wife of 40 years, Anne Jeanne Laurie Keeshan, had died in 1995. Keeshan's grandson, Britton Keeshan, became the youngest person at that time to have climbed the Seven Summits by climbing Mount Everest in May 2004. He carried photographs of his grandfather on that ascent, and buried a photo of the two of them at the summit.

Keeshan was buried in Saint Joseph's Cemetery in Babylon, New York.

Keeshan received many awards, including:

Bob Keeshan speaking for United Way at Bok Tower[where?]