The second general election of 1927 was caused by the uncertain political arithmetic within Dáil Éireann. Only three votes separated the two largest parties, Cumann na nGaedheal and Fianna Fáil, and the government was very unstable. When Fianna Fáil decided to enter the Dáil in August it gave its support to the Labour Party'smotion of no confidence in the Cumann na nGaedheal government and to replace it with a Labour-led coalition with Labour leader Thomas Johnson as President of the Executive Council. The Labour Party was supported by Fianna Fáil and the National League Party. On the other hand the Cumann na nGaedheal government had the backing of the Farmers' Party and most of the Independent TDs. When the vote was taken, John Jinks, a National League TD failed to attend. As a result the vote was a dead heat and the Ceann Comhairle voted with the government. The motion failed.
W. T. Cosgrave realised that this situation could not continue and a general election was called in the hope of providing a clear result. Cumann na nGaedheal fought the election on its record in government so far. Fianna Fáil was the new party on the political scene with new policies and the promise of self-sufficiency. The Labour Party had done well on its last outing and was hoping, and was predicted, to win extra seats, in spite of internal divisions. The Farmers' Party represented the needs of agricultural labourers. Sinn Féin had been reduced by the founding of Fianna Fáil from 47 to 5 seats in the first 1927 election, and did not contest a single seat this time due to a lack of financial assets.
Following the general election Cumann na nGaedheal were able to form a minority government with the support of the Farmers' Party and other Independent TDs. The Labour Party leader, Thomas Johnson, lost his seat in the election and subsequently retired from politics.