1998-99 commenced with another new manager and ten new signings. Ex-Aston Villa winger, Ray Graydon arrived and transformed the club from a popular, yet poorly organised, team into a disciplined and effective force in Division Two. Walsall were inspired by former Oldham Athletic and Everton left-back Neil Pointon, the talismanic striker Andy Rammell, new signing Darren Wrack, and the ever-dependable Jimmy Walker in between the sticks - gaining the massive feat of finishing as runner-up to big-spending Fulham in the final table. The achievement was made even more remarkable as The Saddlers finished above huge spending Manchester City, Wigan Athletic and Staffordshire rivals Stoke City.

Promotion was followed by a heartbreaking final match demotion from Division One. During the season Walsall had clung on to their First Division status, beating local rivals Wolverhampton Wanderers, Birmingham City and West Bromwich Albion along the way. Demotion at Ipswich Town on the final day was a bitter-blow to a group of players who played beyond their ability and to their absolute limits all season.

However, The Saddlers returned to the second-tier of English Football at the first try, defeating Reading 3-2, after extra time, in a thrilling Play-off final at Cardiff's Millennium Stadium. After a promising start to the season, the form began to slip away over the winter period. However, the signings of Fitzroy Simpson and Don Goodman added much needed steel to the side and spured them on to reach the promised land of Division One once again.