Elections to Liverpool City Council were held on Tuesday 1 November 1881. One third of the council seats were up for election, the term of office of each councillor being three years.
Ten of the sixteen wards were uncontested.
After the election, the composition of the council was:
* - Retiring Councillor seeking re-election
Caused by the death of Councillor John Henstock (Party? Lime Street, elected 4 April 1881) which was reported to the Council on 9 November 1881.
Caused by the resignation of Councillor Alexander Balfour (Liberal, St. Peter's, elected 1 November 1879).