Following Colchester's promotion from League One, bookmakers had the U's as favourites for an immediate return to the third tier, especially following manager Phil Parkinson's acrimonious resignation and subsequent appointment at Hull City.

Indeed, Colchester found themselves on the edges of the play-off positions for much of the season, eventually ending the campaign six points shy after a patch of poor form in February and March.

On the back of a successful 2005–06 season for midfielder Neil Danns, scoring 15 goals, he left for Birmingham City in a deal worth up to £850,000.

After a solid yet unsuccessful start to the season, Colchester were without a win after four games, albeit defeats by a single goal on each occasion.

Parkinson returned to Layer Road with his struggling Hull side in November as Chris Iwelumo equalled a club record and scored four for himself as the U's beat the Tigers 5–1.

Talk at this point turned to the potential for the U's to ground-share Portman Road with Ipswich Town if they achieved the ultimate dream of promotion to the Premier League as the first turf was cut on the new stadium development at Cuckoo Farm.