Following a hard season ended in fifth place, Francesco Guidolin, sacked and successively recalled during the final days of the 2006–07 season, was not confirmed as Palermo head coach. On May 31, 2007 Atalanta boss Stefano Colantuono was announced to fill the vacant managing position.
Regarding the team players, Giovanni Tedesco announced, immediately following the final 2006–07 matchday, to have agreed for a one-year contract extension. The first two signings for the new season, midfielder Giulio Migliaccio from Atalanta and goalkeeper Samir Ujkani from Anderlecht, were announced on June 8; the same day, Palermo captain Eugenio Corini announced his intention not to renew his contract with the rosanero, due to expire on June 30, following a dispute with the club management. The June 22 deadline for resolution of co-ownership brought to the return of Davide Matteini from Empoli F.C., whereas Stephen Makinwa, previously in co-ownership between Palermo and Lazio, was ultimately acquired by the biancazzurri. In the same day, Andrea Caracciolo was announced to have been sold to Sampdoria in a co-ownership bid., whereas Mariano González, back from a season loan to Inter, was loaned out once again, this time to FC Porto. On June 28, the club unveiled the signing of Serbian international Boško Janković from Mallorca. On July 5 two moves were made by Palermo, with David Di Michele being sold to Torino and Fabrizio Miccoli signed from Juventus.
Palermo's pre-season phase begun on July 12, when all the players gathered in Udine and then moved to the training camp of Bad Kleinkirchheim, Austria, where the team stayed until August 4. From August 6 to 12, the team successively moved to Villach, and then returned to Palermo in a training session at Stadio Renzo Barbera in front of 10,000 spectators. They made their Serie A debut on August 26, a 2–0 home loss to AS Roma, and achieved their first seasonal win in the next matchday, a 4–2 away win at Livorno. The season ticket sale closed on September 11 with 19,992 tickets being altogether sold.
Palermo started their UEFA Cup campaign, their third consecutive, challenging Czech side FK Mladá Boleslav in the first round. The first leg, played at Mlada's home venue, ended in a 1–0 win for the rosanero thanks to a late winner goal by Boško Janković. This was followed by two Serie A consecutive wins, a 1–0 away victory at Cagliari and a last-minute 2–1 triumph against AC Milan, with Miccoli scoring a late winning goal during injury time.
However, in the return leg of the UEFA Cup first round, Palermo lost 1–0 at home, with a Mladá goal scored during injury time, and were defeated in the subsequent penalty shootouts, causing an unexpected elimination. On October 2007, Palermo managed just to achieve four ties out of four matches, causing the team to slide down to ninth place, six points behind the fourth UEFA Champions League spot; increasing fans disappointment for these poor results led them to whistle and jeer the players during their October 31 home match, a home match with Parma ended in a 1–1 tie thanks to a late penalty equaliser scored by Amauri. In the aftermath of the match, Palermo captain Andrea Barzagli heavily criticized the fans for what he felt to be a hostile reception. They returned to win on November 10, in a 2–1 home win to Napoli, after five consecutive ties. A crushing 5–0 away loss at Juventus on November 25 however persuaded club chairman Zamparini to sack Colantuono the next day and reappoint Guidolin at the helm of the rosanero. Guidolin marked his debut on December 2, losing the Sicilian derby 3–1 in Catania. This was followed by two consecutive wins to Fiorentina and Atalanta and a home tie with Lazio, which allowed the rosanero to end the 2007 solar year in sixth place, four points shy of the fourth UEFA Champions League spot. Still in December, Palermo made their Coppa Italia seasonal debut with a 0–0 draw against Udinese at Stadio Friuli. They were however later defeated at home, and thus eliminated from the competition, by the bianconeri on the return leg, with a goal by Antonio Floro Flores scored during injury time.
During the January transfer market, Palermo loaned out Franco Brienza, the only player to have been a rosanero in all the top three Italian tiers, to Reggina. They successively sold Marco Pisano (on loan) and Aimo Diana (permanent transfer) to Torino, and signed full back Federico Balzaretti from Fiorentina and youngsters Luca Di Matteo and Edgar Çani from Pescara. The rosanero ended the first Serie A half in eighth place, after two consecutive league defeats to Sampdoria and Siena (the latter at home), and notably with the second-worst defensive line in terms of goals allowed. Palermo ended their negative row of results of four consecutive defeats (including Coppa Italia matches) with a 1–0 home win to Livorno on February 2. However, a disappointing row in March, with two points in four matches, and Palermo down to eleventh place, causing Zamparini to attack Guidolin for the poor performances of his team. This was followed by a third consecutive defeat, a disappointing 3–2 home loss to Genoa, and subsequent criticism by Guidolin who attacked Palermo fans declaring "it's like playing in hell here". These remarks were immediately criticized by the club management, who consequently declared they might reconsider Guidolin's position as head coach in the very next future. On March 24 Palermo announced to have sacked Guidolin and reappointed Colantuono at the helm of the rosanero. In the debut match for his second tenure, Palermo lost 1–0 to Napoli, suffering the match's lone goal during injury time, but managed to defeat 3–2 third-placed Juventus the following week thanks to a late goal by full back Mattia Cassani, and then winning the Sicilian derby the following week thanks to a free kick by Fabrizio Miccoli.
Palermo ended the league in eleventh place, their worst result since the rosanero's return to the top-flight in 2004.
|August 26, 2007 – 20:30||AS Roma||Home||Lost 0–2||32,202||16||(Report)|
|September 2, 2007 – 15:00||Livorno||Away||Won 4–2||Rinaudo, Miccoli (2), Amauri||8,475||10||(Report)|
|September 16, 2007 – 15:00||Torino||Home||Drew 1–1||Simplício||25,987||9||(Report)|
|September 23, 2007 – 15:00||Cagliari||Away||Won 1–0||Zaccardo||10,000||7||(Report)|
|September 26, 2007 – 20:30||AC Milan||Home||Won 2–1||Diana, Miccoli||30,761||5||(Report)|
|September 30, 2007 – 15:00||Empoli||Away||Lost 1–3||Cavani||6,002||6||(Report)|
|October 7, 2007 – 15:00||Reggina||Home||Drew 1–1||Amauri||22,845||6||(Report)|
|October 21, 2007 – 15:00||Udinese||Away||Drew 1–1||Amauri||13,404||5||(Report)|
|October 28, 2007 – 15:00||Internazionale||Home||Drew 0–0||33,972||9||(Report)|
|October 31, 2007 – 20:30||Parma||Home||Drew 1–1||Amauri||22,680||9||(Report)|
|November 4, 2007 – 15:00||Genoa||Away||Drew 3–3||Cavani, Brienza, Amauri||23,595||8||(Report)|
|November 10, 2007 – 20:30||Napoli||Home||Won 2–1||Tedesco (2)||25,138||7||(Report)|
|November 25, 2007 – 20:30||Juventus||Away||Lost 0–5||20,036||8||(Report)|
|December 2, 2007 – 15:00||Catania||Away||Lost 1–3||Caserta||17,400||11||(Report)|
|December 8, 2007 – 20:30||Fiorentina||Home||Won 2–0||Miccoli, Simplício||22,823||8||(Report)|
|December 16, 2007 – 15:00||Atalanta||Away||Won 3–1||Cavani, Langella (own goal), Amauri||5,452||6||(Report)|
|December 23, 2007 – 15:00||Lazio||Home||Drew 2–2||Simplício, Amauri||24,148||6||(Report)|
|January 13, 2008 – 15:00||Sampdoria||Away||Lost 0–3||19,574||6||(Report)|
|January 20, 2008 – 15:00||Siena||Home||Lost 2–3||Amauri, Miccoli||22,542||8||(Report)|
|January 26, 2008 – 20:30||AS Roma||Away||Lost 0–1||32,618||9||(Report)|
|February 2, 2008 – 18:00||Livorno||Home||Won 1–0||Miccoli||23,033||9||(Report)|
|February 10, 2008 – 15:00||Torino||Away||Lost 1–3||Amauri||17,914||10||(Report)|
|February 17, 2008 – 15:00||Cagliari||Home||Won 2–1||Cavani, Janković||21,829||8||(Report)|
|February 24, 2008 – 20:30||AC Milan||Away||Lost 1–2||Bresciano||50,643||10||(Report)|
|February 27, 2008 – 20:30||Empoli||Home||Won 2–0||Simplício, Rinaudo||22,897||10||(Report)|
|March 2, 2008 – 15:00||Reggina||Away||Drew 0–0||10,316||9||(Report)|
|March 8, 2008 – 20:30||Udinese||Home||Drew 1–1||Simplício||24,833||8||(Report)|
|March 16, 2008 – 15:00||Internazionale||Away||Lost 1–2||Materazzi (own goal)||49,360||9||(Report)|
|March 19, 2008 – 20:30||Parma||Away||Lost 1–2||Cavani||12,599||11||(Report)|
|March 22, 2008 – 15:00||Genoa||Home||Lost 2–3||Amauri (2)||23,260||12||(Report)|
|March 30, 2008 – 20:30||Napoli||Away||Lost 0–1||49,341||13||(Report)|
|April 6, 2008 – 20:30||Juventus||Home||Won 3–2||Amauri (2), Cassani||34,271||12||(Report)|
|April 12, 2008 – 18:00||Catania||Home||Won 1–0||Miccoli||24,847||10||(Report)|
|April 19, 2008 – 20:30||Fiorentina||Away||Lost 0–1||28,827||10||(Report)|
|April 27, 2008 – 15:00||Atalanta||Home||Drew 0–0||23,288||10||(Report)|
|May 4, 2008 – 15:00||Lazio||Away||Won 2–1||Amauri (2)||20,786||10||(Report)|
|May 11, 2008 – 15:00||Sampdoria||Home||Lost 0–2||23,929||11||(Report)|
|May 18, 2008 – 15:00||Siena||Away||Drew 2–2||Janković, Miccoli||9,339||11||(Report)|
|September 20, 2007 – 18:15||1st Round – 1st Leg||Mladá Boleslav||Away||Won 1–0||Janković||4,110||(Report)|
|October 4, 2007 – 20:45||1st Round – 2nd Leg||Mladá Boleslav||Home||Lost 0–1 (2–4p)||6,335||(Report)|
|December 19, 2007 – 15:30||Round of 16 – 1st Leg||Udinese||Away||Drew 0–0||1,695||(Report)|
|January 16, 2008 – 15:00||Round of 16 – 2nd Leg||Udinese||Home||Lost 0–1||12,516||(Report)|