United won their fourth league title in five seasons at the end of the 1996–97 campaign, made easier by the fact that their rivals were "not up to the job".^[68] Under Ferguson, the team made a better go in the Champions League and reached the semi-final stage for the first time in 28 years.^[69] United did not advance any further, after defeat by Borussia Dortmund of Germany.^[70] Norwegian signings Ole Gunnar Solskjær and Ronny Johnsen were the notable additions to the squad, with the former ending the season as the club's top goalscorer. In May 1997, Cantona informed Ferguson his decision to retire from football.^[71] The player "felt exploited by United's merchandising department" and questioned the ambition of the club, reasons which Ferguson understood.^[71] Striker Teddy Sheringham was signed as Cantona's replacement from Tottenham Hotspur, with Blackburn defender Henning Berg the other significant purchase that summer.^[72][73] In the close season, United appointed Keane as their new captain. Ferguson described him as "the best all-round player in the game" after the team's 1997 FA Charity Shield win and believed Keane had "all the right ingredients" to succeed from Cantona.^[74]

Defeat by Leeds United in September 1997 was the team's first league loss in seven months; Keane during the match injured himself and was subsequently ruled out for the rest of the season with ligament damage.^[75] Schmeichel was placed as captain in his absence. By November, United opened up a four-point lead in the league, which prompted talk of whether any team could catch them.^[76] After Arsenal's defeat of United in the same month, Ferguson acknowledged a one-horse race was "not good for the game" and admitted his opponents "... deserved to win on their second-half performance".^[77] The fallibilities of Liverpool, Chelsea and Blackburn Rovers as league challengers allowed United during the winter to extend their lead by 11 points, albeit with Arsenal having games-in-hand.^[78] This was enough for Manchester bookmaker Fred Done to pay out on punters who backed the champions retaining their title.^[79] United in other competitions fared poorly; they went out of the FA Cup in a replay to Barnsley and were eliminated in the quarter-final stage of the Champions League against AS Monaco on away goals.^[80]

Arsenal closed the gap on United in March and a winning goal from their winger Marc Overmars when the two teams met at Old Trafford handed them the initiative.^[81] Ferguson was bullish of his team's chances despite the setback and insisted that Arsenal "... will find that they start dropping points towards the end of the season – there's no question about that".^[81] Arsenal however collected maximum points, sealing the title with a win against Everton on 3 May 1998. Ferguson congratulated his opponent Arsène Wenger, who in his first full season at the club, later completed the double: "I think it's good for my young players to lose on this occasion. I wholeheartedly acknowledge what Arsenal achieved between Christmas and the end of the season."^[82] United straight after paid £10.75 million for PSV defender Jaap Stam, a new club record fee.^[83] Ferguson wanted to strengthen the squad's attacking options and identified Aston Villa's Dwight Yorke as his main target.^[84] Attempts to sign Yorke were rebuffed at first, before Ferguson persuaded Edwards to increase United's initial offer of £10 million.^[85] A£12.6 million deal was reached a week into the league campaign; Yorke signed minutes before the deadline to submit United's squad for the Champions League.