Manager Mike Newell began the process of keeping key players, committing defenders Chris Coyne and Russell Perrett, midfielders Paul Hughes, Michael Leary and Steve Robinson, and youth players Curtis Davies, Rob Beckwith and Stephen O'Leary to two-year contracts, as well as rejecting an offer from Sheffield Wednesday for leading scorer Steve Howard.

[7] The same day, midfielder Matthew Spring, who had started his career at Luton and made nearly 300 appearances for the team, joined Championship club Leeds United on a Bosman free transfer.

[8] On 12 July 2003–04 Player of the Year Emmerson Boyce, another who had graduated through the youth system, turned down the offer of a new contract and joined Premier League club Crystal Palace on a free transfer.

[9] The club signed Slovenian goalkeeper Dino Seremet on a two-year contract on 23 July from NK Maribor, the player arriving on a free transfer following a successful trial period.

[10] After five friendly victories against local sides, Luton were brought back to earth with a 4–0 home loss to Dutch champions and former European Cup winners Ajax on 23 July.

Narrow, albeit high-scoring, victories away to Swindon Town and Barnsley pushed Luton into second place in the table, and marked the first time since the 1981–82 season that the club had won their first three games of a campaign.

[15][16] Youth player Keith Keane, who had played a number of games in August in place of the injured Kevin Foley, was rewarded for his performances with a two-year professional contract on 3 September.

[19] First-choice goalkeeper Marlon Beresford was injured in a 2–1 home win against Peterborough United, meaning back-up Dino Seremet made his debut as a substitute.

This record quickly evaporated with three defeats in a row, to Huddersfield Town, Walsall, and a heavy 3–0 loss against Hull City, who had now overtaken Tranmere as Luton's nearest rivals.

[23] The injury to Marlon Beresford and poor goalkeeping performances from Dino Seremet led Luton to sign Simon Royce on a one-month loan from Charlton Athletic on 29 October.

[26] The club remained unbeaten throughout November, winning convincingly against Wrexham and Milton Keynes Dons, drawing against Doncaster Rovers, and claiming an FA Cup first round victory over Southend United.

Steve Howard was sent off early in Luton's game at Brentford on 7 December, with the club losing 2–0 in their fourth league defeat of the season and reducing their lead at the top of the table to just one point.

Three further wins in quick succession over Hartlepool United, Bradford City and Walsall saw this four-point gap increase to nine, and even a loss to Port Vale in late February, described by Newell as their "worst performance of the season", that ended a 14-game unbeaten league run kept Luton comfortably in first place.

[38] The club drew 2–2 with Oldham Athletic on 19 March, with a last-minute Steve Howard goal earning a point that saw Hull City close the gap to the top.

The club had six players named in the League One Team of the Year – goalkeeper Marlon Beresford; centre-backs Curtis Davies and Chris Coyne; midfielders Kevin Nicholls and Ahmet Brković; and top scorer Steve Howard.

[44] Steve Howard, who had been the subject of bids from Sheffield Wednesday, Nottingham Forest and Burnley throughout the season, committed himself to Luton on 16 June by signing a new two-year contract.