This election was for all of the 90 seats in the 32nd New South Wales Legislative Assembly and was conducted in single member constituencies with compulsory preferential voting.

The result of the election was: The UAP/Country Party coalition of Bertram Stevens and Michael Bruxner had a majority of 28 (down 2).

Stevens continued as Premier until 5 August 1939 when he resigned after being censured by the Legislative Assembly, with 10 United Australia members crossing the floor.

[2] Labor's continued poor showing in this election was seen as evidence of Jack Lang's inability to appeal to the middle ground of the electorate.

New South Wales state election, 26 March 1938Legislative Assembly << 1935–1941 >> The member for Woollahra, Sir Daniel Levy (United Australia), died in 1937.