Fernando Wood ran for re-election to a third term in office. His second term in office had marked by conflict with the Republican state legislature and the leadership of Tammany Hall. As a result, the state legislature voted to revise the city charter to shorten his current term to one year and hold an election for a new two-year term. Opponents of Wood, including Republicans, Know-Nothings, reformist Democrats and former Free Soil Democrats united behind Daniel F. Tiemann, who won a majority of the vote to unseat Wood.
The campaign was framed by Wood's conflict with the legislature over the new charter, as well as the legislature's dissolution of the municipal police, which had been controlled by Wood, and establishment of a new metropolitan police force. Wood orchestrated his own arrest on June 16, heightening the conflict between his "Municipals" and the state-backed "Metropolitans". After the New York Court of Appeals ruled in favor of the Metropolitans, Wood supporters instead turned to street violence, touching off the Dead Rabbits riot in July.