Rubuta ci gaba don wannan sakin layi - Lokacin da Wilson ya sanar da ritaya a watan Maris na 1976, Callaghan ya ci nasara da wasu 'yan takara biyar don za a zaɓa Shugaba na Jam'iyyar Labour; an nada shi firaminista a ranar 5 ga Afrilu 1976. Duk da lashe rinjaye a cikin House of Commons a zaben 1974, Labour ya rasa wannan lokacin da Callaghan ya zama firaminista, kuma da dama daga cikin zaben da aka yi a farkon watanni ya tilasta Callaghan ya yi yarjejeniyar amincewa da yarjejeniyar samarwa tare da Liberal Party. Duk da yake wannan ya fara tabbatar da kwanciyar hankali, a sakamakon manyan rikice-rikicen masana'antu da yaduwar yajin aiki a cikin "Winter of Discontent" na 1978-79 da kuma rashin nasarar zaben raba gardama kan Scotland.
, ya jagoranci kananan jam'iyyun shiga Conservatives don wuce wani rashin amincewa a Callaghan a ranar 28 ga Maris, 1979. Kodayake ya kasance yana da mashahuri a cikin binciken ra'ayi, Callaghan ya jagoranci Labour zuwa ga rashin nasara a zaben 1979 kuma Margaret Thatcher ya maye gurbinsa.