The PNM remained in power following the death of Dr. Williams, but its 30-year rule ended in 1986 when the National Alliance for Reconstruction (NAR), a rainbow party aimed at Trinidadians of both African and Indian descent, won a landslide victory by capturing 33 of 36 seats. Tobago's A.N.R. Robinson, the NAR political leader, became Prime Minister. The NAR began to break down when the Indian component withdrew in 1988. Basdeo Panday, leader of the old United Labor Front (ULF), formed the new opposition with the UNC.

In July 1990, the Jamaat al Muslimeen, an extremist Black Muslim group with an unresolved grievance against the government over land claims, tried to overthrow the NAR government. The group held the prime minister and members of parliament hostage for 5 days while rioting and looting shook Port of Spain. After a long standoff with the police and military, Jamaat leader Yasin Abu Bakr and his followers surrendered to Trinidad and Tobago authorities. In 1992 the Court of Appeal upheld the validity of a government amnesty given to the Jamaat members during the hostage crisis. Abu Bakr and 113 other Jamaat members were jailed for two years while other courts debated the amnesty's validity. All 114 members were eventually released after a ruling by the U.K. Privy Council.

In 1991 elections, the NAR lost control of the government to the PNM, led by Patrick Manning who became prime minister. The Panday-led UNC finished second and replaced the NAR as chief opposition party. In 1995 Manning called for elections, in which the PNM and UNC both won 17 seats and the NAR won two seats. The UNC allied with the NAR and formed the new government, with Panday becoming prime minister--the first prime minister of East Indian descent. Although elections held in 2000 returned the UNC to power, the UNC government fell in 2001 with the defection of three of its parliamentarians, and the subsequent elections resulted in an even 18-18 split between the UNC and the PNM. President A.N.R. Robinson ironically bypassed his former party colleague Panday by inviting PNM leader Manning to form a government, but the inability to break the tie delayed Parliament from meeting. Manning called elections in 2002, following which the PNM formed the next government with a 20-16 majority. The next elections must be held by 2007, and both parties have spent part of 2005 attempting to prepare for those polls. Latest speculation is whether Panday, facing trial for alleged corruption during his tenure as prime minister, will be replaced in October as UNC leader to allow a new generation to take over. Manning shows every indication of intending to continue in office.

Both parties are committed to free market economic policies and increased foreign investment. Trinidad and Tobago has remained cooperative with the United States in the regional fight against narcotics trafficking and on other issues.