This election was for all of the 90 seats in the 24th New South Wales Legislative Assembly and it was conducted in single-member constituencies with a second ballot if a majority was not achieved on the first.

The 23rd parliament of New South Wales was dissolved on 21 February 1917 by the governor, Sir Gerald Strickland, on the advice of the premier William Holman.

In early 1917, Holman's supporters merged with the Liberals to form the New South Wales branch of the Nationalist Party.

Although the merged party was dominated by former Liberals, Holman became its leader, and thus remained premier.

The Nationalists won a sweeping victory, scoring a 13-seat swing which was magnified by the large number of former Labor MPs who followed Holman out of the party.