Geelong entered the season after finishing 10th in 2006. Geelong was the best performing side of the home and away season, finishing 12 points clear of second-placed Port Adelaide, with an 18–4 record and a percentage of 152.76, thus winning the McClelland Trophy. Geelong had lost only one game since Round 5: by five points to Port Adelaide at Skilled Stadium in Round 21 when Dominic Cassisi goaled with 3 seconds remaining. The grand final was Geelong's first appearance in a premiership decider since losing the 1995 Grand Final. Geelong defeated the Kangaroos in their qualifying final at the Melbourne Cricket Ground by 106 points, earning them a second week bye, before they met the Collingwood Magpies in a preliminary final showdown at the MCG. Geelong won a tightly fought contest with the Magpies by 5 points in front of a crowd of 98,002, a higher attendance than the actual grand final.
Port Adelaide, having finished 12th the previous season, rose 10 places to become 2nd on the ladder in 2007, with a 15–7 record and a percentage of 113.54. Port Adelaide had hosted reigning premiers West Coast Eagles at AAMI Stadium in their qualifying final, winning by three points after trailing all night. Having also earned a second week bye, they proceeded to the third week and hosted the Kangaroos in a preliminary final at AAMI Stadium, winning by 87 points. The 2007 AFL Grand Final was Port Adelaide's first since winning the 2004 Grand Final.
This was the first Grand Final fought between two teams that missed the finals the previous year since 1997.
The match ended with Geelong winning by the score of 24.19 (163) to 6.8 (44), recording the greatest winning margin in AFL Grand Final history, 119 points. This broke the previous record of 96 points set by Hawthorn against Melbourne in the 1988 VFL Grand Final; it was also, at the time, Port Adelaide's heaviest defeat in an AFL match (this record was surpassed in 2011). Geelong's 417 disposals was also a Grand Final Record. Meanwhile, Port Adelaide became the only finals side in history to have more handballs than kicks. Geelong scored 17.10 from Port Adelaide turnovers, while the Power scored just 1.2 from the Cats'.
The Cats' win ended a 44-year premiership drought for the club. The last flag had come in 1963, and since then the club had lost five Grand Finals. It was also the first premiership won by a team from Victoria since Essendon's 2000 victory.