David Marshall resigned as Chief Minister on 7 June 1956 after the discussions he initiated with the British for self-governance broke down. His successor, Lim Yew Hock, led another delegation that included opposition leader Lee Kuan Yew. Marshall derided Lee for compromising on British terms and challenged that they should resign and recontest their respective constituencies, in which Lee accepted. Lee was successfully returned but Marshall made a temporary retirement from politics instead, pressured by speculations that bloodly street protests would soon break out. LF fielded another candidate in Marshall's place but victory went to the new LSP, formed by the merger of PP and DP. By that time, three LF Assembly Members were either expelled or had resigned from their party, while independent AM M. P. D. Nair had joined. LSP gained one AM and lost one, with independent R. Jumabhoy joining and Lim Cher Keng, formerly from DP, resigning. MU was expelled by UMNO and MCA from their alliance for breaching an agreement to stay away from the election. 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