During the 2002–03 English football season, Ipswich Town competed in the First Division, following relegation from the FA Premier League the previous season. Despite being relegated, Ipswich Town had achieved UEFA Cup qualification for the second season running, this time through UEFA's fair play rankings.
The financial cost of relegation the previous season saw Ipswich enter administration on 10 February. The financial problems had caused the sale of both key players like Marcus Stewart and promising young players like Titus Bramble and Darren Ambrose, leading to poor results on the pitch that left Ipswich struggling near the relegation zone. A 3-0 defeat at fellow strugglers Grimsby Town proved to be the final straw and manager George Burley was sacked in October. First team coach and former Ipswich player Tony Mowbray took charge of the next four games, winning one, before being replaced by Joe Royle - a former player for Town's archrivals Norwich City. Royle turned Town's fortunes around considerably and they finished in 7th place, 4 points off the playoff places.
In the League Cup, Ipswich reached the fourth round before being knocked out by eventual winners Liverpool 5-4 on penalties, after Tommy Miller's strike in the fourteenth minute was cancelled out by El Hadji Diouf's 54th-minute penalty.