The main objective of the study is to analyze the influence of the spirit of tolerance in dealing with Malaysia's racial issues. Studies show that it is of utmost importance for this pluralistic society to practice tolerance in order to foster unity and understanding among the different races living in Malaysia. This is supported by the government's role in eliminating racial segregation, respecting religious rights, and allowing each ethnic group to retain their cultural identity. As a result, racial tension between ethnic groups has dissipated, and through the introduction of the New Economic Policy (NEP), the economic gap between ethnic groups has also decreased. This study focused on the period during the eve of independence, since it is considered the most critical period in the nation's history. The findings reveal that the spirit of tolerance played a significant role in the process of securing independence for the Federation of Malaya as evidenced by the formation of the ALLIANCE, a collaboration among the three major ethnic groups in Malaya -the Malays, Chinese and Indians -through the formation of the United Malays National Organization (UMNO), the Malayan Chinese Association (MCA) and the Malayan Indian Congress (MIC).