They also reached the 1st round of the FA Cup, where they were eliminated by Folkestone, and finished as runners-up to Tunbridge Wells Rangers in the Mid-Week Section.

Manager Ted Davis began strengthening his squad ready for a push to reach the Football League over the summer period.

The public responded by turning out in force for a game against Gillingham, with 8,142 in attendance, and a week later, a visit from Arsenal 'A' saw 10,129 watch Colchester beat their counterparts 2–0.

In a very successful season for the club, Colchester claimed the Southern League title by one point over Guildford City, scoring 110 goals in 44 games.

They finished second in the Mid-Week Section, and reached the semi-final of the Southern League Cup, although due to fixture congestion, the game could not be played during the regular season and was postponed until the 1939–40 campaign.