A busy pre-season for transfers saw the Hammers purchase five new players: defenders Javier Margas and Neil Ruddock, experienced striker Ian Wright, midfielder Marc Keller and goalkeeper Shaka Hislop. On the opening day Wright scored on his debut at Sheffield Wednesday in the 1–0 victory. The goals were flowing in the home game with Wimbledon as goals from Hartson and Wright gave the Hammers a 3–0 lead, but there followed a complete collapse as they conceded four goals to give Wimbledon victory. Three days later the Hammers bounced back as they knocked Liverpool off the top spot with a 2–1 home win.

A poor performance in the League Cup saw the Hammers lose 2–1 on aggregate to Third Division Northampton Town. Ian Wright scored twice at Newcastle in a 3–0 win and three successive victories in November moved the side up to second in the table. The away form got worse with five successive defeats, including a 1–0 loss in the FA Cup to Swansea City. More transfer activity saw Ludek Miklosko and Tim Breacker join Queens Park Rangers, and John Hartson was sold to Wimbledon for £7.5 million. With funds at his disposal, manager Redknapp then bought midfielder Marc-Vivien Foe together with Italian forward Paolo Di Canio, who had recently served an 11-match ban for pushing over referee Paul Alcock. The arrival of Di Canio caused great excitement as he brought a degree of skill, showmanship, and awesome talent.

After this there were shock defeats as both Sheffield Wednesday and Arsenal won 4–0 at Upton Park. Results then improved and by the end of April, following a good 2–1 win at Tottenham, the side were in seventh spot and chasing a European place. There was a setback in May as the home game with Leeds saw Wright, Hislop and Lomas all sent off, which resulted in a 5–1 defeat. The final home game with Middlesbrough ended with a 4–0 victory and in finishing fifth the Hammers qualified to play in the Intertoto Cup, giving them a possible route to the UEFA Cup.