The ruling PAP was facing one of the toughest hurdles in its history. Singapore was saddled with the worse economic crisis since independence. This was also Prime Minister Goh Chok Tong's last GE as PM.

For the first time in 38 years, a formal political umbrella emerged from within the opposition. The four-party SDA was established with Chiam See Tong as chief, consisting of the SPP he led, which was the leader party, along with NSP, PKMS and JPS.

Former WP Non-Constituency Member of Parliament J. B. Jeyaretnam, who lost his seat after being declared a bankrupt owing to lawsuits by PAP leaders, resigned from the party, citing disagreements with the present leadership. The sole WP MP, Low Thia Khiang, took over as secretary-general and became WP's third-generation icon.

This GE saw the temporary cessation of four-member GRCs and a shortest run-up period of 17 days after opening of the register of electors. The Electoral Boundaries Review Committee, which released its report on 17 October 2001 after reaching PM's Office a day before, gave opposition parties only a few days of preparation time and raised their ere. PM Goh defended his position to hold the GE shortly after America's 9-11, before the crisis turned worse.

A seat had been vacated in 1999 after the conviction of PAP MP Choo Wee Khiang over commercial crimes but no by-election was held as the seat was within a GRC. Under the law, an entire electoral constituency, be it GRC or SMC, has to be vacated before a by-election is required. Another increase of the election deposit amount this time was the most significant one in history, which almost doubled.

On nomination day, the sole WP GRC team was disqualified for filing incomplete papers in Aljunied GRC. Opposition parties ended up contesting only a-third of the seats, the lowest portion since 1968, which resulted in the largest number of walkovers for PAP in history.

PAP achieved its third highest score among the general elections it has contested. WP's Low and SDA-SPP's Chiam retained their seats but saw their winning margins slashed from the previous GE. With these two opposition wins, one NCMP seat was offered to and accepted by Steve Chia of SDA-NSP, who became the youngest and first ever non-WP NCMP.