The election will be the first under a new combined first-past-the-post and proportional representation system that analysts say will give smaller parties a voice in parliament.
Regional observers have touted it as a showpiece of Africa's ability to produce home-grown solutions for the world's poorest continent plagued by wars and dictatorships.
"The system will work to compensate parties disadvantaged by voting in the constituencies. Losers will be included, not excluded, by the political system and will have less reason to spoil the vote," said Professor Roger Southall, a leading observer of Lesotho politics.
The ruling Lesotho Congress for Democracy (LCD) won a landslide at the last election in May 1998, winning all but one of the 80 seats. But the opposition alleged the vote was rigged.
The country then slid into chaos as protests mounted and an army mutiny described as a "creeping coup" nearly overthrew incumbent Prime Minister Pakalitha Mosisili's government.
South African and Botswanan troops intervened to quell the mutiny in September 1998 under the banner of the regional Southern African Development Community (SADC).
Mosisili survived and a South Africa-led initiative led to the ruling party and opposition alliance agreeing to a new poll to be overseen by a newly created Interim Political Authority.
Under the new complex voting system, the National Assembly has been expanded to 120 seats with the additional 40 seats allocated proportionally. More than 1 000 candidates from 19 political parties will be contesting for parliament.
Voters will cast two votes - one for their constituency member of parliament and another for the party of their choice.
Democracy might grow
"Lesotho has had a volatile political history, hopefully now roots of democracy will begin to grow," said Chris Maroleng of the Institute for Security Studies.
Mosisili's LCD party is expected to be returned to power, albeit with a reduced majority.
The 59-year old former lecturer faces stiff competition from former military ruler Major-General Justin Lekhanya (64), of the opposition Basotho National Party, and Kelebone Maope (55), who in November 2001 formed the Lesotho People's Congress.
Lauded internationally for his Western-backed economic reforms, Mosisili has been criticised for failing to cut massive unemployment, estimated at 40%.
Lesotho, which has suffered two military coups and seven years of military rule since independence from Britain in 1966, faces a debilitating famine and a devastating HIV/Aids pandemic affecting about a quarter of its two million people.