Liverpool had already won the First Division title, and so completed the Double. Everton had finished as runners-up to Liverpool in the league. However, the ban on English clubs in European competitions imposed after the previous season's Heysel disaster remained in force, meaning that Everton were unable to compete in the 1986–87 European Cup Winners' Cup (Liverpool as league champions would have gone into the European Cup).
Notable changes to the Everton side who had been runners-up in the final a year earlier were the absence of goalkeeper Neville Southall due to injury (his place in the team being taken by Bobby Mimms) and new signing Gary Lineker playing in the forward position which had previously been occupied by Andy Gray.
Liverpool, on the other hand, were competing in their first FA Cup final for 9 years, they had not won it for 12, and had no players remaining from the side that had won the 1974 final.
As substitute Steve McMahon was unused, Liverpool became the first team to compete in the FA Cup Final without fielding an English player. The last remaining player to leave winners Liverpool was Ian Rush, who joined Leeds in 1996, while Kevin Ratcliffe's departure from Everton in 1992 meant that the runners-up had lost all of their players from the FA Cup final team within six years.