Republican Speaker of the New Jersey General Assembly Thomas Kean narrowly defeated Democratic U.S. Representative James Florio, 49.46%-49.38, following a recount.

[10] The incredibly large primary field led candidates to define themselves on the issues, taking bold positions and trying to make the competition look unexciting by comparison.

[15] Merlino ran a campaign focused on his record as President of the New Jersey Senate, making him sherpa of the Byrne legislative agenda and sometimes acting governor.

He emphasized his sponsorship of laws banning handguns and a prescription drug assistance bill targeted at senior citizens.

It drew opposition from many rural legislators and sportsmen's and gun clubs[13][10] and support from the National Coalition to Ban Handguns.

Neil Upmeyer, director of the State Division of Elections, had predicted 575,000 Democrats would vote, and some campaign consultants projected the number would actually be much smaller.

In his victory speech, Florio suggested the fall campaign would be a referendum on the Reagan administration's spending cuts, which impliedly shifted the burden of governance to the states.

Both candidates entered the race as moderates, though emphasizing their appeal to supporters of President-elect Ronald Reagan following his overwhelming victory in the state.

[20] The surprise entry into the race was businessman Bo Sullivan, whose political involvement had been limited to service as finance chair of the Essex County Republican organization.

Sullivan laid the groundwork for his campaign at the 1980 Republican National Convention in Detroit, where despite being a complete unknown, he fêted the New Jersey delegates with a lavish poolside dinner.

[15] Former senator James Wallwork, an Essex County resident like Kean and Sullivan, ran as a firm conservative and Reagan supporter.

[20] Kramer's campaign, which had broad establishment support in all regions of the state, suffered a setback when the legislature passed an open-primary law, which effectively abolished the powerful "county line" for the 1981 primary.

"[23] Kramer's reputation also suffered from the perception of Paterson and Passaic County as corrupt, though he aggressively distanced himself from an ongoing probe into highway bid-rigging by voluntarily testifying before a grand jury.

In May, Kean released his plan for a comprehensive series of tax cuts over four-years, which he said would work "hand in glove" with the supply-side economic program of the Reagan administration.

He recalled the 1977 campaign, where the early Republican polling lead had vanished after Raymond Bateman's economic program was heavily attacked by Governor Byrne.

Kramer said, "If we insist on playing tax plan politics for the sake of a primary victory, as Tom Kean is doing once again, we are asking for a repeat of the 1977 Republican disaster."

[7] In one early television ad, Kean was shown playing bocce, an indication that he was appealing to ethnic Italian voters.

[8] Bush and Kean emphasized that the race was about local issues, rather than a referendum on the White House; Bradley and Florio argued the opposite.

Florio attacked Kean's program as "voodoo economics" and compared it to similar plans which he said caused "financial chaos" in Wisconsin and Minnesota.

[29] Immediately after the election, New Jersey Democrats accused the Republican National Committee of intimidating minority voters in Newark, Camden, and Trenton via the Ballot Security Task Force, a private organization which sent out mailers to voters in these cities and posted armed off-duty police officers and large signs at certain precincts.

[30][31] Litigation arising from the Ballot Security Task Force activities led to the Republican National Committee operating under a consent decree through 2018 constraining its use of a variety of tactics it deployed in the New Jersey 1981 gubernatorial campaign.