Murayama was elected prime minister by the National Diet on 29 June 1994 after the threat of a no-confidence vote had brought down the previous minority Hata Cabinet.

The coalition cabinet consisted of 13 Liberal Democrats, six Socialists (including the Prime Minister) and two members of New Party Sakigake.

[1] The decision by the LDP to support the leader of their traditional rival, the Socialists, for prime minister caused a split in party ranks.

Former LDP Prime Minister Toshiki Kaifu announced that he was leaving the party and was put forward by the anti-LDP coalition parties led by Tsutomu Hata and Ichirō Ozawa as their candidate for prime minister when the vote was held on June 29.

[2] Since no candidate gained an absolute majority in the first round, a runoff vote between Murayama and Kaifu was held later the same day, with Murayama being elected with the support of the Japan Socialist Party, New Party Sakigake and the majority of the LDP.