Ronald Reagan, then the governor of California, challenged Ford for the Republican nomination in the primaries. Though the race was close, Ford defeated Reagan in the primaries by a small margin. Ford chose Robert Dole, a senator from Kansas to be his running mate. The Republican National Convention of 1976 was the last in which the nomination was still undecided going into the convention.
Ford's competition was Democratic nominee Jimmy Carter, a relatively unknown politician from Georgia. Carter won the nomination easily against several better known candidates, including George Wallace and Sargent Shriver. Carter's distance from Washington DC and its scandals helped him gain support from voters who were tired of political corruption. Walter Mondale was selected to be his running mate.
Ford was still dealing with the aftermath of Watergate, including the unconditional presidential pardon of former President Nixon, for which he received criticism. The bad economy also hurt Ford, but since he was the incumbent, he received extra publicity, which helped his campaign.
Three presidential debates took place between Carter and Ford. While Ford did well in the first debate, the second debate proved challenging for him. Ford denied Soviet control of Eastern Europe - a statement that severely damaged his campaign and allowed Carter to take the lead.
The race was close, with less than one million popular votes and just 2 percent between the two candidates. Carter swept the South except for Virginia, and narrowly won most of the northern states. Ford won every state in the West except Hawaii, and one faithless elector from Washington voted for Reagan instead of Ford. Carter won the election with 297 electoral votes, and became President of the United States.