The 1938 Chatham Cup became the 15th nationwide knockout football competition in New Zealand, after a two-year gap caused by the lack of a 1937 Chatham Cup competition (see 1936 Chatham Cup for explanation).
The competition was run on a regional basis, with regional associations each holding separate qualifying rounds.
The final was played in soggy conditions to which Mosgiel found it difficult to adapt. Despite playing with the breeze in the first half, the southerners were 1-0 down after just six minutes through a goal from Sonny Ward. Shortly after the half-time break Tom Walker doubled the lead, and a third was added by Toby Janes at the hour mark after a pass from Ward. Walker completed the scoring with a tap-in late on in the second half.