Under the new MMP system, 65 members were elected in single-member districts by first-past-the-post voting (including five Māori electorates), while a further 55 "top-up" members were allocated from closed lists to achieve a proportional distribution based on each party's share of the nationwide party vote.

New Zealand First won 17 seats—including sweeping every single Māori electorate, all of which had been dominated by the Labour Party since the Second World War.

[5] The electorates of Avon, Awarua, Christchurch North, Clutha, Dunedin West, Fendalton, Lyttelton, Marlborough, Rangiora, Selwyn, St Albans, St Kilda, Sydenham, Tasman, Timaru, Waitaki, Wallace, West Coast, and Yaldhurst were abolished in the South Island.

Six existing electorates (Christchurch Central, Dunedin North, Invercargill, Nelson, Otago, and Rakaia) were kept.

Seven electorates (Aoraki, Banks Peninsula, Clutha-Southland, Ilam, Kaikoura, Waimakariri, and West Coast-Tasman) were newly formed.

The electorates of Birkenhead, East Coast Bays, Eastern Bay of Plenty, Eastern Hutt, Eden, Far North, Franklin, Gisborne, Glenfield, Hastings, Hauraki, Hawkes Bay, Henderson, Heretaunga, Hobson, Horowhenua, Howick, Island Bay, Kaimai, Kaipara, Kapiti, King Country, Manawatu, Matakana, Matamata, Miramar, Mt Albert, Onehunga, Onslow, Otara, Pahiatua, Panmure, Papakura, Papatoetoe, Pencarrow, Porirua, Raglan, Remuera, Roskill, Taranaki, Tarawera, Te Atatu, Titirangi, Tongariro, Waikaremoana, Waikato, Waipa, Waitotara, Wellington-Karori, and Western Hutt were abolished in the North Island.

Twenty existing electorates (Albany, Auckland Central, Hamilton East, Hamilton West, Mangere, Manurewa, Napier, New Lynn, New Plymouth, North Shore, Pakuranga, Palmerston North, Rangitikei, Rotorua, Tamaki, Tauranga, Wairarapa, Waitakere, Whanganui, and Whangarei) were kept.

Seventeen electorates (Mahia, Owairaka, Waipareira, Karapiro, Ohariu-Belmont, Port Waikato, Epsom, Hutt South, Mana, Manukau East, Maungakiekie, Northcote, Northland, Rimutaka, Rongotai, Taranaki-King Country, and Tukituki) were newly formed.

Eight electorates (Bay of Plenty, Coromandel, Hunua, Otaki, Rodney, Taupo, and Wellington Central) were recreated.

The election, however, was not decided by the comparative strengths of the major parties – rather, the smaller New Zealand First party, which won 17 seats, including 5 Māori seats won by the Tight Five, and was placed in the position of "kingmaker", able to provide the necessary majority to whichever side it chose.

[8] Although predicted by many to ally with Labour, on 10 December 1996 New Zealand First leader Winston Peters chose to form a coalition with National, thus preserving Prime Minister Jim Bolger's administration.

Labour's success was credited largely to its leader Helen Clark being seen as having convincingly won the election debates and running a strong campaign on health, education and social services, while Bolger was said to have run a lackluster campaign.

Although the party had briefly crossed the 5% threshold in some polls, it gained only 4.33% at the election, and therefore did not qualify for parliamentary representation.

With the exception of the Maori Ratana movement, this is the closest that an overtly religious party has come to winning representation in parliament.

For United, this was a significant loss – established by break-away MPs from National and Labour, the party entered the election with seven seats, but only Peter Dunne managed to retain his position, being helped by National's decision not to field a candidate in his electorate of Ohariu-Belmont.

For the most part, traditional patterns prevailed when it came to the distribution of electorates – National performed best in rural areas, while Labour was strongest in the cities.

The table below shows the results of the 1996 general election: Key National Labour Alliance NZ First