The following teams competed: Airdrie United, Alloa Athletic, Ayr United, Berwick Rangers, Brechin City, Cowdenbeath, Peterhead, Queen's Park, Raith Rovers and Ross County.
The team which finished bottom were automatically relegated to the Third Division and the team which finished second bottom were entered into the Second division play-offs with the teams which finished second, third and fourth in the Third Division for a place in the 2008–09 Second Division.
In the first half of the season each team plays every other team twice (home and away) and then do the same in the second half of the season.
Source: The League Insider Source: The League Insider The ninth placed team in the Second Division played the fourth placed team in the Third Division and third placed team in the Second Division played the second placed team in the Second Division.
The play-offs were played over two legs, the winning team in each semi-final advanced to the final.