While Belfast South was one of the UUP's strongest seats, they had suffered several electoral setbacks, and had lost two other Belfast seats to the Democratic Unionist Party (DUP) at the 1979 general election. The DUP had not contested Belfast South in 1979, so when they announced their intention to contest the by-election, many commentators expected them to win the seat.
South Belfast had also produced many of the Alliance Party of Northern Ireland's best results. Despite the possibility of a split Unionist vote between the UUP and the DUP, a win looked out of their reach, but they hoped to increase their share and retain second place. They stood David Cook, a former Lord Mayor of Belfast.
The nationalist vote in the constituency was low; the main nationalist party, the Social Democratic and Labour Party (SDLP) had never won so much as 10% of the vote. Despite this, the SDLP stood Alasdair McDonnell, a former member of Belfast City Council, hoping to increase their vote. Sinn Féin, while tentatively planning to contest some elections in Northern Ireland, had not yet contested elections at this point and with little background in the constituency, chose not to stand a candidate.
Labour candidates under various descriptions had also traditionally fared well in the constituency, so the United Labour Party, led by Paddy Devlin, stood Brian Caul.
The UUP turned the tide of losses to the DUP; they held the seat with a convincing 39.3% of the vote, and giving them hope for the upcoming 1982 Northern Ireland Assembly election. Alliance slightly increased their vote and held second place. The DUP took a disappointing 22.6% of the vote and managed only third position. The SDLP slightly increased their share, but only to 8.8%. McMichael's policies failed to find favour, but even he was able to beat the rapidly declining figure of Labourism in Northern Ireland; Caul took only 0.7%.
Smyth held the seat for the UUP until he stood down in 2005. Two of the other candidates in the by-election later became MPs: McCrea won Mid Ulster at the 1983 general election. McDonnell stood in South Belfast at each subsequent election, gradually increasing his share of the vote, until in 2005 he unexpectedly won.