The Liberal Republican party evolved out a coalition of unlikely bedfellows, with their common purpose being the defeat of Grant. They had different views on the leading issues of the day, including the tariff, civil service, black rights, and corruption. Three days into their convention in Cincinnati, they found that they had nominated New York Tribune editor Horace Greeley, a man that many of them opposed or personally despised. Greeley's position past abolitionist activities and his present view on protectionism made him an unlikely candidate. What appealed to the Liberal Republicans was his more recent actions on behalf of sectional reconciliation. Greeley accepted the Liberal Republican nomination, in his own word, "with the distinct understanding that, if elected, I shall be president not of a party, but of the whole people, I accept your nomination, in the confident trust that the masses of our countrymen, North and South, are eager to clasp hands across the bloody chasm which has too long divided them, forgetting that they have been enemies in the joyful consciousness that they are, and must henceforth remain, brethren." In July, the Democratic Party also accepted Greeley as their candidate.

Greeley campaigned early on agrarian and labor issues, but soon found himself promoting the idea that the main problem between North and South was and always had been a lack of understanding and communication. Greeley even claimed that the Ku Klux Klan was a product of the failure of Republicans to offer a swift and sweeping amnesty to the Confederates. Greeley appealed to many Southerners, who saw him as a chance to vote anti-Grant and pro-local autonomy and white supremacy. In the upper midwest, Greeley gave more than 200 speeches in a five state swing from September 17-29, but along the way managed to offend Union veterans for their "pseudo-heroic" loyalty to Grant. He also distanced himself from black voters by snubbing a black delegation in Pennsylvania, and by suggesting that his past views of slavery and labor may have been mistaken. The Republicans responded by waving the "bloody shirt" once again (blaming the war and the assassination of Lincoln on Southerners & Democrats), and by unleashing Frederick Douglass, whose powerful oratory thrashed Greeley's Democratic allies as having murdered half a million men in an effort to destroy the government and to perpetuate slavery.

With the economy showing signs of improvement, Grant easily won a second term with 55% of the popular vote. He was somewhat aided by Thomas Nast's relentless cartoon attack on Greeley in Harper's Weekly.