Palermo started their season with a surprise 1–2 home loss to Ravenna, a Lega Pro Prima Divisione team (two divisions below Serie A). Successively, Zamparini confirmed the intention to sell out newly acquired striker Túlio de Melo, citing the impossibility to ensure the player a guaranteed place in the starting lineup as he wanted. In the meantime, on August 30, and just a few hours before the rosanero's kickoff league match, Palermo announced the signing of 18-year old striker Levan Mchedlidze on a loan basis. The next day, Lille OSC confirmed to have finalized the permanent signing of Túlio de Melo from Palermo. On September 1 Palermo completed the signing of Davide Succi from Ravenna, and loaned out Boško Janković to Genoa. Both moves were finalized following several unsuccessful attempts to sign Brazilian international striker Nilmar from Sport Club Internacional, as confirmed in a club statement.
The very next day saw notable criticism from supporters and local and national media regarding the club strategy in the football market, especially underlining the lack of an appropriate replacement to local hero Amauri and the controversial sale of Túlio de Melo only two months after being signed by the rosanero. Zamparini answered to these criticisms by making the whole bid amounts in the seasons available to the public, in a very unusual move in Italy, noting his club was among the ones who spent the most money in order to sign new players.
On September 4, 2008, in what was promptly received as another controversial move, the club surprisingly announced the immediate dismissal of Stefano Colantuono from his position, making him the first head coach to be sacked in the whole Serie A season, contemporaneously announcing the appointment of Davide Ballardini as new rosanero boss. Ballardini made his debut with an impressive 3–1 home win to AS Roma on September 13.
Ballardini then followed up the next week by beating Genova 2-1, with centre back Cesare Bovo scored a winning goal from 26 meters out.
Palermo's wonderful form continued as they stopped Italian giants Juve 2-1, ending their unbeaten season. Miccoli scored a tap-in after Buffon deflected a volley from Uruguayan striker Edison Cavani. Newly acquired youngster Levan Mchedlidze scored in only his second-ever game in the Italian Serie A, grabbing Palermo a surprise win. Palermo then went on to achieve impressive wins to less exciting games, not performing particularly well in away matches. Namely, striking duo of Fabrizio Miccoli and Edinson Cavani proved to be instrumental to the rosanero's successes, with the former Benfica star establishing himself as team topscorer despite being limited by injuries.
Another fan favourite win came in a league match against A.C. Milan, with the rosanero showing probably one of their finest seasonal performances and defeating 3–1 the rossoneri, with goals by Miccoli, Cavani and Simplicio, and Sicilian goalkeeper Marco Amelia being instrumental in the team win by saving a penalty shot by FIFA World Player winner Ronaldinho.
On April 23, the Italian National Olympic Committee announced that Moris Carrozzieri was found positive for cocaine as he failed a doping test made immediately after a home game against Torino on April 5. The physical centre-back was immediately suspended from football activities and is likely to face a long ban that could keep him off from the game for up to two years. According to Palermo chairman Maurizio Zamparini and sports director Walter Sabatini, the player might likely have assumed cocaine during a night out in a club in Milan. Such events, which prived Palermo of one of the main defenders in the squad, were followed by a 0–3 loss to AC Milan, with two of the rossoneri goals being scored from controversial penalty kicks and Palermo reduced to 10 men after Cesare Bovo was sent off minutes after the beginning of the second half; this brought to bitter criticism against the referee from Maurizio Zamparini, who also announced a one-day news blackout as a form of protest.