Had Patten been re-elected in 1992, he might have been rewarded by appointment as Foreign Secretary, although in his autobiography John Major said that he would have made Patten Chancellor of the Exchequer. However, in the three weeks leading up to the election, many party insiders sensed that Patten would lose his seat, and Major was considering a patronage appointment.
In any event, in July 1992, he became the 28th and the last Governor of Hong Kong until its handover to the People's Republic of China on 30 June 1997. He was given an official Chinese name, Pang Ting Hong (), a name with an etymology based on the words "stability" and "health", before which he was known in Hong Kong as "BRIT" with an imperialist taint. Unlike most previous Hong Kong Governors, he was not a career diplomat from the UK Foreign Office but a politician. However, he was not the first former MP to become a Governor of Hong Kong: that was John Bowring (
Governor of Hong Kong 1854—1859). Also, John Pope Hennessy (
Governor of Hong Kong 1877-1882), was a Conservative MP before he entered Colonial Service.
Patten's tenure faced several different challenges, as many in Hong Kong were still reeling from the Tiananmen Square Massacre a few years earlier, while others were suspicious of whether or not the British would act in their best interest. However the general opinion regarded him positively. He took steps to get in touch with the people of the colony, and was known for his penchant for taking public strolls around Hong Kong as well as in the media limelight. Hong Kong affectionately nicknamed him
Fat Pang or
Fei Peng (), making him the only governor to have a widely recognised Chinese nickname.
Patten's most controversial actions are related to the election of the Hong Kong Legislative Council. Legco members returned in 1995 were originally to serve beyond the handover, thereby providing institutional continuity across the reversion of Hong Kong to the PRC. Beijing had expected that the use of functional constituencies with limited electorates would be used to elect this council, however Patten extended the definition of functional constituencies and thus virtually every Hong Kong subject was able to vote for the so-called indirectly elected members (see Politics of Hong Kong) of the Legislative Council.
His measure was strongly criticised by the pro-Beijing political parties of Hong Kong, which would suffer from the electoral changes. Patten was also denounced by the PRC government as the 'whore of the East,' a 'serpent' and a 'criminal who would be condemned for a thousand generations' (). The legislative council which was elected under Patten's governorship was dissolved upon the handover of Hong Kong to the PRC and replaced by a Provisional Legislative Council () which functioned until elections were held under the previous rules in 1998.
However, Patten's institutional reform gained unprecedented support in Hong Kong and the criticism from the PRC government raised his popularity to a level he had not previously enjoyed in the UK; he was widely seen as standing up for the colony's rights. Not withstanding the electoral controversy, even some of his critics admired his eloquence and praised his efforts to raise the level of debate in the colony. Ending up, the PRC did bow to pressure and after the handover, an increasing portion of seats in the Legco would be directly elected.
At 00:00 HKT 1 July 1997 (16:00 GMT, 30 June 1997), he sent the following telegram:
I have relinquished the administrationof this government. God Save The Queen. Patten.
This marked the end of British rule in Hong Kong and after the handover ceremony he left the city, together with Prince Charles, on board the British royal yacht, HMY
Britannia. Patten was noted to be in tears after his speech at the Transfer of sovereignty over Hong Kong in 1997.