At the 1984 election, the Peacock-led Coalition slightly reduced Labor's majority. He resigned the Liberal leadership the following year after failing to have his deputy John Howard removed; he was duly replaced by Howard. He remained a member of the shadow cabinet, and in 1987 unsuccessfully challenged Howard for the leadership; he was instead elected deputy leader. Peacock finally returned as leader in 1989. However, his second term lasted less than a year, as he resigned after another electoral defeat in 1990. Peacock left politics in 1994 and was later appointed Ambassador to the United States (1997–1999). Along with Tom Hughes, he is the last surviving Liberal member of the Second Gorton Ministry (1969-1971) and the McMahon Ministry.