Colchester exited the FA Cup in round three to Reading, while they fell to defeat after a penalty shoot-out to First Division side Aston Villa.

Rekindling memories of the Quarter-final tie five years prior, the U's were drawn at home to Aston Villa, who won 2–0 at Layer Road.

However, in the away fixture at Villa Park, Colchester earned a 2–0 victory to take the tie to extra time and penalties.

Keeping track with the league leaders for much of the season – and even being level on points with first-placed Sheffield United at one stage – Colchester had ten away wins to their name before successive defeats to Blackpool, Blackburn Rovers and Reading in February and March 1980.

Injuries to Steve Foley and Bobby Gough contributed to the U's downturn in form, and having occupied a top four spot for much of the season, Colchester had to be content with a fifth-place finish, six points short of the promotion places.