It continued to be organised by the RFU, in co-operation with the Welsh Rugby Union, but featured a new format including only the twelve teams from the Guinness Premiership and the four regional Welsh sides which competed in the Celtic League.

The Welsh clubs' inclusion initially caused them to be expelled from the Celtic League in June 2005.

Scottish and Irish officials were angered that the Welsh regions had apparently consented to Powergen Cup fixtures on the same weekend as league matches.

[2] By the end of the month, a compromise was reached and the regions were readmitted, with the Welsh sides giving a "substantial financial contribution" and committing to mid-week league fixtures.

The pool stages for this initial format featured one game against each team, followed by semi-finals and a final at Twickenham Stadium.

[5] Overall, the 2005–06 cup drew a 12% attendance boost in the group stages over the previous year's competition.

[11] It also saw the final move away from Twickenham for the first time, with Worcester's Sixways Stadium hosting in its place.