The period of Tony Blair’s leadership preceding the 1997 general election saw a transformation of the Labour Party. This was of immense importance to the political role of trade unions. The emergence of New Labour can only be understood through analysis of developments in both party and unions. This paper discusses the recasting of the party’s industrial politics and reform of party structure, locating its provenance in electoral, representational and governmental strategies. It examines the unions’ response, rooted in their industrial predicament but shaped by political reaction to it. Union politics intersected but did not coincide with the policies of New Labour. Political differentiation in the unions and opposition to New Labour is considered. It is concluded that change represents restructuring rather than termination of the link, but it will be further tested with New Labour in government.