The final was played at Windsor Park in Belfast, Northern Ireland on 12 May 2007, and was won by Drogheda United with a 4-3 penalty shoot-out victory over Linfield when the scores were level at 1–1 after extra time.

The draw for the 2007 Setanta Cup competition was made on 7 December 2006 with the original competing teams being the identical ones to the previous year's competition.

On 30 January 2007, however, Shelbourne announced that they were withdrawing from the competition for reasons relating to their financial troubles and the fact that they would be unlikely to field a team of players.

Their place was given to the 2006 FAI Cup runners-up to Derry City, St Patrick's Athletic, despite the fact that the next best-placed in the previous season's league (Shelbourne's qualification route), who did not have a place in the Setanta Cup already, were Sligo Rovers.

There would be no replays if the matches were drawn; instead, extra time would decide winners immediately thereafter.