The 1995/96 season started with a new management team, some new players and renewed optimism that the worst of the Club's problems were behind them. A prominent addition to the playing staff was the Lossiemouth striker Iain Stewart. His goalscoring exploits were to make him a priceless asset. Elgin defender Iain MacArthur and winger Davie Ross from Brora Rangers were also to prove important acquisitions.
The season's first competitive match was an away Coca-Cola cup tie against Berwick Rangers on 5th August. After a 1-1 draw and extra time the Inverness side went out 5-3 on penalties. Two league defeats and exit from the League Challenge Trophy at the hands of Alloa did not auger well for the rest of the season. Things improved and they gradually pulled off the foot of the Division with a series of high-scoring wins - 5-0 against both East Stirling and Alloa, 5-1 against Arbroath and 6-1 against Albion Rovers. At half time the Albion score was 6-0 and the manager was furious that they eased up and lost the second half 1-0! His major fear was that goal difference could make all the difference at the end of the season - in the end this was not an issue.
Along with Livingston, Brechin and Ross County they became clear promotion contenders. By November 11th Caley Thistle were second with Livingston top and Ross County 3rd. December 9th saw County comprehensively defeated 5-2 in the final of the Inverness Cup. This match also marked the debut of new signings Mike Teasdale and Brian Thomson. January 6th was the start of a superb Scottish Cup run. Livingston were defeated 3-2 at Telford Street and in the 3rd Round East Fife were dispatched after 2 games, extra time and penalties. The deciding match took place on Monday 12th February and the following Saturday they went to Stenhousemuir and won 1-0 thanks to a Brian Thomson goal. This result achieved a place in the Quarter Final of the Cup and a home draw against mighty Rangers. On safety grounds the Scottish Football Association moved the game to Tannadice, Dundee. The build up was electric and cars and buses streamed down the A9 on the morning of March 9th. Rangers won 3-0 but it was a great day for players, officials and fans.
Arguably the cup run was counter-productive as it led to a league fixture backlog and a run of poor results. Draws against Alloa and Queen's Park either side of the Rangers game were disappointing and a 2-1 defeat by rivals Ross County the following Saturday really upset Steve Paterson. A 1-1 draw against Arbroath on 23rd March effectively ended the League challenge but it only became mathematically impossible with a 3-0 defeat at the hands of Cowdenbeath on 13th April. Steve Paterson then set about planning for 1996/97. Seven players were placed on the transfer list and the free transfer lists of other clubs scoured for potential recruits to strengthen the team.
1995/96 saw Caledonian Thistle and Ross County finish 3rd and 4th in the League respectively with the Inverness side 15 points behind runaway winners Livingston and 6 behind second placed Brechin. Iain Stewart was top goalscorer in the Third Division with 24 goals and defender Richard Hastings was capped by Canada at Under 20 level.
The Stadium saga continued throughout 1995/96 with the sum of £900,000 being on everyone's lips. This was a sum pledged by Inverness District Council towards the project but thrown into doubt by a number of procedural and economic difficulties. The total Stadium cost was to be just short of £5 million and a complex web of mutually dependent funding relied on the Council releasing the £900,000. On Monday December 19th a final vote secured the funding. A condition was the incorporation of Inverness into the Club name, a matter already considered at the Members' Club meeting the previous June. Inverness District Council went out of existence on March 31st 1996 to be replaced by Highland Council. The £900,000 had still not been paid by then but new Chief Executive Arthur McCourt acted quickly to ensure that it was available from the Inverness Common Good fund - albeit in 2 instalments. An important piece in the financial jigsaw was Inverness Harbour Trust's commitment to meet the cost of a new road through the Longman Industrial Estate - an essential requirement of the development. Construction could now begin although the best estimate for completion was now Autumn 1996. Once more the Scottish League and Texas Homecare (now part of the Sainsbury Group) agreed to a delay. The stage was now set for a new Stadium, a new name - Inverness Caledonian Thistle F.C. - and (hopefully) promotion.