The team finished first in the Scottish Premier Division and won its eighth consecutive league title.

Rangers were knocked out the Scottish League Cup by Aberdeen at the semi-final stage, losing 2–1.

Aided by the sale of Duncan Ferguson the previous season, between July and February manager Walter Smith spent nearly £12million on rebuilding his squad by signing the likes of Peter van Vossen, Paul Gascoigne (a then Scottish record signing at £4.3million), Stephen Wright and Gordan Petric.

November saw the departure of Mark Hateley as he returned to England in a £1.5million move to Queen's Park Rangers – the largest fee paid for a 34-year-old at this time.

Hateley had lost his place in the first team to Gordon Durie who partnered Ally McCoist after two seasons mostly spent on the sidelines due to injuries.