[6] 19-year-old Ruben Zadkovich, who was signed as short-term cover for Ufuk Talay late in the 2005–06 season, also upgraded to a two-year full-time contract with Sydney.

The group stage of the A-League pre-season cup saw Sydney drawn with Queensland Roar FC, Newcastle United Jets and the New Zealand Knights, whilst in the "bonus round" they would face Perth Glory.

A red card to Alvin Ceccoli for "foul and abusive language"[10] towards referee Mark Shield after the end of the first half left the hosts with ten men for the remainder, and although Sydney managed to create several chances, Adelaide ultimately came out on top with a goal to Kristian Rees in the final minute of the match.

Sydney FC's 2006–07 A-League season campaign began with a rematch against their 2005–06 Grand Final opponents, the Central Coast Mariners.

Two days before the Melbourne match it was confirmed that Sydney FC's marquee player Dwight Yorke would be leaving the club for English Championship team Sunderland for a reported £200,000 transfer fee.

[16] With two draws and a win in their following three matches leaving them sitting in third position after five rounds, Sydney welcomed the arrival of Italian Benito Carbone for a four-match "guest stint".

[17] The 35-year-old had an instant impact, setting up goals for Ruben Zadkovich and Sasho Petrovski before scoring one of his own as Sydney ran away 4–1 winners over rivals Adelaide at Hindmarsh Stadium.

The run coincided with a large injury list for Sydney, travelling to Newcastle with a squad of just 13 players despite the return of Matthew Bingley on a short-term contract.

The result ensured that Sydney retained second position and their one-point margin over Adelaide United on the table despite the deduction of three points due to salary cap breaches.

Although the FFA would not divulge the nature of the breach, Sydney CEO Tim Parker attributed it to Sydney's unexpectedly heavy schedule which saw them play in the 2005 Oceania Club Championship, 2005 FIFA Club World Championship and the A-League finals series – preventing players from completing the additional services for which they were paid.

One month after the initial penalty, in September 2006, it was announced that the FFA would again be investigating alleged discrepancies regarding the contract of a Sydney FC player.

[24] Sydney "reluctantly accepted" the decision and elected not to appeal the penalty,[25] which left them still in second position with three premiership rounds remaining, but their gap back to Adelaide United was reduced to a single point.

The home and away strips were modified for the club's Asian Champions League campaign in early 2007, adding a gold trim for the tournament.