The main story of the season was the sale of star striker Lomana LuaLua to Premier League side Newcastle United for £2.25m.

After scoring a hat-trick against Queens Park Rangers in the League Cup, LuaLua made his transfer to Bobby Robson's Newcastle United for a fee of £2.25m in September.

The deal proved to be a huge financial boost to the club that helped secure the medium-term future of Colchester United.

In the FA Cup, Colchester suffered another first round exit to non-League opposition when Yeovil Town comprehensively won 5–1 at Huish Park.

In the league, Steve Whitton guided his side to 17th position, six points clear of the relegation places.