Singapore was facing the toughest economic situation since independence due to the terrorist attacks in the United States of America on 11 September 2001, as Prime Minister Goh Chok Tong went into the GE as the PM and head of the ruling PAP for the final time. The fateful day, where airline planes were hijacked and intentionally collided into several USA buildings, was to be remembered as "September 11", "Nine One One" or "Nine 11" in subsequent years.

For the first time in 38 years, a formal political umbrella emerged from the opposition. The four-party SDA was established with Chiam See Tong as its chief and comprised of the SPP he led, which would be the linchpin of SDA, along with NSP, PKMS and JPS. WP, SDP, DPP and SNF had declined to join the alliance.

Former WP Non-Constituency Member of Parliament J. B. Jeyaretnam, who lost his seat three months before the GE after becoming a bankrupt from failing to pay defamation damages, 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 face.

Parliament was dissolved a day after the Electoral Boundaries Review Committee released its report on 17 October 2001, which wiped four-member GRCs temporarily off the map until 2011. Opposition leaders were annoyed with having only a few days of preparation in lieu of the new demarcations. PM Goh defended his decision, stating that the circumstances were unique and he had to hold the GE before the economic crisis turned worse. Eight Nominated Members of Parliament, instead of the usual nine, had been sworn in on 1 October 2001 but due to the snap polls, they served only 17 days. However, six were into their second or third terms while the two new NMPs were re-selected after the GE.

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 jump in history, which almost doubled.

On nomination day, the sole WP GRC team, consisting of Tan Bin Seng, Abdul Rahim Abdul Rahman, Huang Seow Kwang, James Gomez and Yaw Shin Leong, was disqualified in its bid for Aljunied GRC for filing incomplete papers. Opposition parties ended up contesting only one-third of available seats, the lowest proportion of seats cumulating into the largest number of walkover victories for PAP since the 1968 GE. DPP retained the father-son combination as its only slate.

The youngest candidate was Bryan Lim, running under the SDP ticket. During one of the campaign days, its chief Chee Soon Juan crossed paths with PM Goh and used a loudhailer to question him on an alleged loan made by the Singapore government to Indonesian President Suharto. The following year, Chee was sued by PM Goh and Senior Minister Lee Kuan Yew for this defamatory remark that insinuated they had issued the loan improperly.

PAP achieved a landslide, winning its third ever highest score in a GE. One outcome was that an election deposit was forfeited in a straight contest in Ayer Rajah, the first time since 1980 that this happened. Nonetheless, WP's Low and SDA-SPP's Chiam retained their seats although both saw their winning margins slashed from the previous GE. With these two opposition wins, one NCMP seat was available to Steve Chia of SDA-NSP, who became Singapore's youngest NCMP to date.