The historic championship success of 1997/98 was much in contrast to the previous season. In December of the 1996/97 season Newry Town had gained only 5 points from 11 outings. However things changed - the club had almost ceased to exist when Joe Rice arrived to set in motion a 'rags-to-riches' recovery. The new chairman signed the then manager of top club Linfield as the new Director of Football at Newry. With Trevor Anderson on board results began to show. Top class players such as Dessie Gorman and Derek Cooke enabled The Town to finish a respectable fifth in the table after a run of 10 games unbeaten.

This early success set the scene for domination of the first division in 1997/98. It was Joe Rice's plan to make Newry Town the most successful team in the Irish League and to enter European Club Football within three seasons. Set backs were not unknown. The malicious burning of the main stand in January 1997 was a disappointment but developments were still made. A new social club was constructed and plans made for a new stand, shop and viewing lounge. In June 1997 the club also launched a YTP scheme to improve local youth football and the Carnbane League.

At this time the club also made a number of influential signings including John Kenny, right winger, from Sligo Rovers and John McDonnell from St Pats.

The new structure to the first division meant that the first half of the season was designated the Ulster Cup - in which Newry lost their first game 2-1 to Bangor and failed to make an impact overall. The first division proper began in October 1997.

By December Newry Town FC had been awarded several awards - testimoney to their success. The team was named 'Team of the Month' for December. Ollie Ralph and Harry Fay also picked up the manager of the month award. John Kenny was awarded 'Player of the Month'. Goalkeeper Paul Stranney was awarded 'Player of the Month ' for January.

At the half way stage of the first division championship Newry topped the table two points ahead of Bangor with a game in hand, even though they lost 1-0 to Bangor on New Years Day. At one stage they had had an unbeaten run of 12 games. The Town continued their success in January by beating Carrick 3-0.

In February the Town pulled off a shock win over Glentoran in the Coca-Cola Cup, winning in a penalty shoot out. At this time Trevor Smith arrived at the club from Portadown.

Newry let the top spot in the league slip to Bangor when they were defeated 1-0 by Distillery, however by March they had regained their pride defeating Bangor at home and moving five points clear at the top of the first division. They did however exit the Coca Cola Cup in a penalty shoot out with Glenavon in the Quarter Final. Stuart McLean joined the club from Linfield on loan.

In April a draw with Dungannon and a win over Ballyclare meant that Newry could secure championship success at home to Distillery. They drew 1-1 with Distillery and won the title. They lifted the cup on the same day Cliftonville won the premier for the first time in 66 years. The final game of the season away to Bangor saw the seasiders lose by two goals to one. This meant that Newry Town finished top of the table with 65 points from 28 games and a lead of seven points over runners up Bangor. Presentation of medals occured at the Park Hotel, Omeath in May.

In the opening game of the 1998/99 season Newry defeated Linfield 2-0 in their first game in the premiership.