The 13th LDP President, Sosuke Uno, took office during the most difficult period the Party had ever experienced in its over thirty years in government. A tumultuous selection process for the Party President was followed by even more daunting challenges. Among these, perhaps the most important was the need to set some reasonable goals for political reform and prepare the Party to face the electorate in time for the Upper House election just a short one and a half months away. The budget finally cleared the Diet at the end of May - the first such "automatic" passage in thirty-five years. However, work on additional legislation related to the budget and other important items required that the Diet session be extended right up until Upper House elections were officially announced. In addition, Uno's inauguration as Prime Minister took place at the same time that bloody clashes were occurring in China's Tiananmen Square. In the run-up to the election, much international attention was focused on the Arch Summit held in the middle of July and how Japan, as a country with a close relationship to China, would choose to react to the incident.

In a policy address he gave on June 5, Prime Minister Uno expressed his intention to continue with the domestic and foreign policies promoted by the Takeshita Cabinet. Uno also commented that he intended to base his policies on the principle of "a slim government and an affluent people" and wished to nickname his cabinet the "Reform Advancing Cabinet." However, in a political contest held in late June that was considered a harbinger of the Party's fortunes in the Upper House election, an LDP candidate lost a by-election for an Upper House seat in Niigata to a new female candidate from the Socialist Party. This humiliating defeat strengthened the impression that an anti-LDP wind was indeed gathering force among the electorate. Further evidence of this was provided by the LDP's poor performance in the Tokyo Metropolitan Assembly election held just before the Upper House election. In a race dominated by the issue of the consumption tax, the Party lost a total of 20 seats while the Socialist Party managed to triple the size of its representation in this body.

As part of his efforts to advance political reform, Prime Minister Uno instructed all cabinet ministers and parliamentary vice-ministers to disclose information about their personal finances, including assets held by their spouses and children. In addition, he established the "Headquarters for the Promotion of Political Reform" (Seiji Kaikaku Suishin Honbu) in mid-June and created committees on political ethics, parliamentary reform, political party reform, the electoral system, political finance, and planning. At the Arch Summit, Uno agreed to cooperate with Western efforts to impose sanctions on China through the freezing of talks on a third round of yen loans. However, he also stressed the need for Japan to formulate its own unique response to events in Tiananmen Square and announced that Japan was opposed to taking any actions that might further isolate China from the international community.

In the 15th House of Councillors Election in July, three issues were of particular importance - the Recruit Scandal, the consumption tax, and the liberalization of Japan's markets for agricultural products. When the results were announced, it became clear that the Party had suffered an unexpectedly bitter defeat. The LDP, which held 69 of the seats up for election, managed to hold on to a total of only 36 of these in proportional representation and regional districts. In contrast to this, the Socialist Party succeeded in doubling its pre-election strength by capturing a total of 46 seats. With the Party's share of the total number of seats in the Upper House having dropped well below the number required for a simple majority, it looked as though the balance of power in this body had tipped in the direction of the opposition parties. Faced with the most serious crisis in the Party's history, Prime Minister announced on the day after the election that he intended to resign from office to take full responsibility for the LDP's electoral defeat.

On August 8, Party leaders convened a Plenary Meeting of Party Members from Both Houses of the Diet and decided to select a successor for Uno through a vote at this gathering rather than through a party convention. When the new LDP President was finally chosen, the Uno Cabinet officially came to an end after having lasted for a total of only 67 days. It was one of Japan's briefest and most troubled administrations, comparable to that of Prime Minister Ishibashi.