The final was played over two legs at the Santiago Bernabéu Stadium, Madrid, Spain, and at the Olympiastadion, West Berlin, West Germany.

For the second year in a row, the competition was won by Real Madrid of Spain, who defeated Köln of West Germany by an aggregate result of 5–3.

Real Madrid became the first club to successfully defend the UEFA Cup, a feat that would only be repeated by Sevilla in two different occasions during the 21st century, both in the UEFA Cup (2006 and 2007) and its successor UEFA Europa League (2014 and 2015).

In the former Inter-Cities Fairs Cup, the unofficial predecessor of the UEFA Cup, it was only achieved by a representative team of the city of Barcelona (1958 and 1960) and by Valencia (1963 and 1964), both also fellow Spanish squads.

It was the first season in which English clubs were serving an indefinite ban from European football competitions due to the Heysel Stadium disaster, which would last for five seasons before being lifted for the 1990–91 season.

A total of 64 teams from 31 UEFA member associations participated in the 1985–86 UEFA Cup, all entering from the first round over six knock-out rounds.

The association ranking based on the UEFA country coefficients is used to determine the number of participating teams for each association: Following the English ban, their four births were redistributed among associations 9–12, each gaining a third birth.

For the 1985–86 UEFA Cup, the associations are allocated places according to their 1984 UEFA country coefficients, which takes into account their performance in European competitions from 1979–80 to 1983–84.

In a departure from previous editions, both semi-finals were played in different days, and the two-legged final was held on consecutive weeks, with the second leg being played on a Tuesday.

4–4 on aggregate; Chornomorets Odesa won on away goals.

2–2 on aggregate; Sparta Rotterdam won 4–3 on penalties.

1–1 on aggregate; Neuchâtel Xamax won on away goals.

Following the referee's controversial decision to award Waregem a penalty in the 44th minute as the foul looked to be outside of the penalty area, Milan fans pelted the pitch with missiles some of which hit several Waregem players.

Following the match, as a result of the incident, AC Milan received a two-match European competition stadium ban, enforced at the start of their 1987–88 UEFA Cup campaign.Waregem won 3–2 on aggregate.

5–5 on aggregate; Real Madrid won on away goals.