For the third time it was held at the Scottish Exhibition and Conference Centre (SECC) in Glasgow on 24 and 25 January.
There were 4 groups of 3, with 11 clubs drawn from the 1987–88 Scottish Premier Division season.
Rangers did not participate and were replaced by English club Nottingham Forest.
The two group winners and runners-up qualified to the quarter-finals and Dundee beat Motherwell 3–2 in the final.
Dundee beat Motherwell to win the tournament for the first time.