Early in his administration, Lindsay earned a reputation for his willingness to walk the streets to communicate with black and Latino New Yorkers. He helped to quell racially charged riots in Brooklyn in July 1966 and in East Harlem in July 1967 by personally appearing there to appeal for calm and peace. In 1967, his record earned him appointment to the National Commission on Civil Disturbances, known as the Kerner Commission, whose report declared "Our nation is moving toward two societies, one black, one white—separate and unequal."

On the night of April 4, 1968, Lindsay learned of the assassination of Martin Luther King, Jr. He and his aides quickly drove to Harlem, where he mingled with the crowds, expressing his sorrow and seeking to dissuade enraged young people from acts of violence. At one point, as crowds grew, aides rushed him from the scene, but he returned later that night. Fires, looting, and vandalism did break out in Harlem and Bedford-Stuyvesant, and two people were killed, but Lindsay’s forays were widely credited with helping to calm the situation. 

Lindsay took also affirmative steps to address problems within minority communities. He appointed a young civil rights activist and lawyer, Eleanor Holmes Norton, to head the city’s Commission on Human Rights, and he made fighting job discrimination its primary mandate. Lindsay used underwriting from Lyndon Johnson’s War on Poverty program to create summer jobs for kids who would have otherwise been on the streets. 

Some of his innovations also had major political costs. In 1967, Lindsay appointed a panel on school reform, headed by McGeorge Bundy of the Ford Foundation and with no representatives from the teachers’ union or the school board. The Bundy report recommended a new “community control system” of largely autonomous local districts, and in 1967-68, the Board of Education permitted the establishment of three experimental districts to be run by locally elected boards. In May 1968, the board in the experimental district in Brooklyn's Ocean Hill-Brownsville transferred 19 mostly white teachers and administrators out of the district. In protest, the United Federation of Teachers (UFT), launched a series of three strikes in the fall of 1968 that shut down the public school system for over seven weeks. The issue split Lindsay’s liberal constituents into warring camps and kept a million children out of school. Lindsay later called the second half of 1968 “the worst of my public life.”

Another Lindsay project that was equally erosive to race and class relations in the city was the administration’s attempt to build 24-story apartment houses for the poor and elderly in the middle-class and upper-middle-class Forest Hills, Queens. Ultimately, a compromise to the housing situation was achieved by a Queens lawyer (later New York State governor) Mario Cuomo.

By the time of his second mayoral run in 1969, Lindsay had alienated a significant portion of working-class whites, who believed that their interests were being neglected in favor of special treatment for minorities. This perception was driven home when it became clear that the mayor had underestimated the effect of a major snowstorm that had arrived on the heels of a garbage strike. He was jeered by Queens residents, who protested the failure to clear snow from their streets.

Having lost his own party's primary, Lindsay ran as an independent and on the Liberal Party Line. A visit from Israeli Prime Minister Golda Meir helped boost his standing among Jewish voters, and a Mets win in the World Series gave him a public relations victory. In the 1969 election, Lindsay once again won a plurality of votes in a three-way race against two conservative opponents, allowing him to succeed to a second term in office.