They also competed in the Scottish Cup, and entered the Champions League at the group stage.

Having qualified automatically for the group stage of the Champions League, Celtic were drawn with Benfica, Copenhagen, and Manchester United.

Although Celtic lost their 3 away games, a 100% record at home earned them qualification to the knockout stage for the first time since the group format was introduced in 1992–93.

During the January 2007 transfer window Celtic signed Scotland internationals and former Hearts players Steven Pressley and Paul Hartley, full-back Jean-Joël Perrier-Doumbé from Rennes on loan and goalkeeper Mark Brown from Inverness Caledonian Thistle.

On 26 May 2007 Celtic won the Scottish Cup for a record 34th time after beating Dunfermline 1–0.