Milicent Fenwick vs Frank Lautenberg, a contest between a Liberal Republican from Bernardsville, and a Self funding Businessman from Paterson resulted in the latter's come from behind victory, ending what was an anxious and disappointing time for the New Jersey Democratic Party.
Coming off of the Backdrop of Florio's close 1981 Loss, and Democratic Senator Harrisson Williams' Resignation due to the ABSCAM Scandal, the mood of the NJ Democratic party was sour, with most resigned to the fact that the Republicans would win the seat early in the campaign.
To this end, funding for Dems was scarce in this race, in doing so giving Lautenberg - a self funder - a strong advantage for the weary party (Source).
As such, Lautenberg's institutional support and self funding locked up the nomination in a somewhat close contest, however most still believed him to likely lose due to the combination of the prior three years and the Popularity of the Liberal Republican nominee, Milicent Fenwick
However, due to a combination of his Agressive campaign, ad Spending (Source) Fenwick's passive campaign strategy (Per NYT), & tying her to Reagan & the negative economic situation, resulted in a narrowing of this gap, and at the tail end of the Campaign Fenwick actively having to go on the defensive to try and stop Lautenberg's Momentum.
After Her Loss, Fenwick would attribute her passive strategy and Lautenberg's money advantage as the main culprits as to why she lost; while also adding that the Economic situation, was a major factor in the same. (Source)
Governor Kean however added that Reagan's purported alienation of certain groups, and specifically because he didn't reach out to women and minorities was a major factor in Fenwick's loss as 'they were voting against the GOP'. (Source)
Lautenberg won 21/40 LDs, 11/21 Counties and 9/14 CDs to Fenwick's 19/21 LDs, 10/21 Counties and 5/14 CDs.