Although the other opposition parties united behind him he lost to incumbent President João Bernardo Vieira by the narrow margin of 52%–48%.

The PRS also emerged as the largest party in the National People's Assembly, winning 38 of the 102 seats, whilst the PAIGC was also beaten by the Resistance of Guinea-Bissau-Bafatá Movement.

However, following his dismissal as Prime Minister later in the year, he resigned as party leader and was replaced by Alberto Nan Beia.

[4] The PRS agreed to support PAIGC in parliament in return for a number of important positions, although it did not get any ministers in the government.

[14][15] After Vieira's assumption of office on 1 October 2005, a crisis within the PAIGC led to several splits that resulted in the PRS becoming the largest party in parliament.

On 12 November 2006, Ialá was re-elected head of the PRS at the party's third congress, with about 70% of the vote; the previous leader, Nan Beia, received 20%.

Ialá finished in second place in the first round of the 2012 presidential elections, but a run-off between him and Carlos Gomes Júnior of the PAIGC was not held following a military coup.

The 2014 elections saw the party nominate Abel Incanda as its presidential candidate, but he finished fourth in the first round with 7% of the vote.