The second season with Chris Nicholl as manager, 1986–87 saw the Saints improve only marginally on their previous campaign, finishing 12th in the First Division table – two places higher than the year before.

Southampton made two key signings in the summer of 1986, making goalkeeper Tim Flowers' loan move permanent and bringing in Scottish striker Colin Clarke.

Nicholl also signed three trainees, including midfielder Neil Maddison and striker Alan Shearer, who would go on to be important members of the Saints squad a few years later.

Leaving ahead of the 1986–87 season were fringe players Eamonn Collins, Alan Curtis, Stuart McManus, Mark Whitlock and David Puckett, while former top scorer Steve Moran left a few months later.

In the Full Members' Cup – which was held in lieu of European competitions due to the banning of English sides following the Heysel Stadium disaster in 1985 – Southampton made it to the third round before being eliminated by Norwich City.

George Lawrence was second highest with eleven goals in all competitions, followed closely by Matt Le Tissier in his debut year for the first team, who scored ten times.

Ahead of the 1986–87 season, Southampton made a club record signing of Colin Clarke, paying local Third Division side Bournemouth £400,000 for the Northern Irish striker.

[3][4][5] Numerous players left the club prior to the start of the season – Eamonn Collins moved to Portsmouth in the Second Division,[6] Alan Curtis was sent to Fourth Division side Cardiff City,[7] Stuart McManus departed for Swedish club Örgryte,[8] and both Mark Whitlock and David Puckett were sent to Bournemouth as part of the deal which brought Clarke to The Dell.

[11] The only players added to the Southampton squad partway through the season were striker Gordon Hobson, who was brought in for £125,000 from Grimsby Town in November to bolster the club's frontline,[12] and goalkeeper Eric Nixon, who was loaned in for a month from Manchester City in December following injuries to Peter Shilton, Flowers and Phil Kite.

[1] A disappointing spell followed as the club lost four out of their next five games, with their only victory a 2–0 home win over Tottenham Hotspur which featured Matt Le Tissier's first starting appearance for the team.

[29] The club finished 12th in the First Division table – an improvement of two places on the previous campaign – equal on points with Sheffield Wednesday in 13th, Chelsea in 14th and West Ham in 15th, but with the only positive goal difference of the four sides.

Despite facing such high-calibre opponents away from home, the Saints held their own for much of the first half, before Graeme Sharp opened the scoring for the hosts in the 37th minute, converting a "stupendous pass" from Adrian Heath past returning goalkeeper Peter Shilton.

[34] The Toffees came close to doubling their lead on multiple occasions shortly after half-time, but it was the visitors who scored next when Gordon Hobson netted from a Danny Wallace setup.

[34] Colin Clarke came close to equalising again for the Saints with two late chances, but Everton ultimately went through to the fourth round, knocking Southampton out at the first hurdle for the first time since 1983.

[35] In the return leg at the County Ground two weeks later, Southampton held Swindon to a goalless draw to secure their status in the next round, with goalkeeper Peter Shilton keeping the score down.