David Marshall, who resigned as Chief Minister on 7 June 1956 after the talks he initiated with the British for self-governance broke down, challenged opposition leader Lee Kuan Yew to resign and each recontest their respective constituencies. Lee accepted and was successfully returned in his seat but Marshall took to temporary retirement from politics instead, pressured by rife speculations of bloodly street protests. Around that time, three LF Assembly Members were either expelled or had resigned from their party while independent AM M. P. D. Nair joined LF. In Marshall's place, LF fielded another candidate but victory went to the new LSP, formed by the merger of PP and DP, which hoped to seize this by-election opportunity to stage a strong comeback. LSP had gained one AM and lost one, with independent R. Jumabhoy joining and Lim Cher Keng, formerly from DP, resigning. SMU was expelled from the UMNO-MCA-SMU alliance for breaching an agreement to stay away from the BE. Its sole AM supported the expulsion and defected to UMNO.

Writ of election: 3 May 1957 [Fri]
Nomination day: 18 May 1957 [Mon]
Polling day: 29 June 1957 [Fri]
Members swearing-in: 17 July 1957 [Wed]

Eligible voters: 29,563
Voter turnout: 12,874 (43.5%)

Election deposit: $500

Cairnhill Tanjong Pagar
Total seats = 2