The 1988 South Carolina squad finished the regular season with losses at Georgia Tech and Clemson and at home to Florida State en route to an overall record of eight wins and three losses (8–3). After their loss to Clemson in the regular season finale on November 19, the Gamecocks publicly accepted an invitation to play in the Liberty Bowl. The appearance marked the first for South Carolina in the Liberty Bowl, and their eighth overall bowl game.
The 1988 Indiana squad finished the regular season with a tie at Missouri and losses against Michigan, Illinois and Michigan State en route to an overall record of seven wins, three losses and one tie (7–3–1). In mid-November, the Hoosiers accepted an invitation to play in the Liberty Bowl. Their appearance marked the first for Indiana in the Liberty Bowl, and their fifth overall bowl game.
The 1988 edition of the Liberty Bowl, marked the 30th edition and the kickoff occurred in sub-freezing conditions. The Hoosiers scored early in the game when Anthony Thompson gave Indiana a 7–0 lead with his nine-yard touchdown run. They extended their lead further to 17–0 at halftime after a ten-yard Dave Schnell touchdown pass to Calvert Miller and a 28-yard Pete Stoyanovichfield goal in the second quarter. The Gamecocks scored their only touchdown early in the third quarter when Antonio Walker blocked a Macky Smith punt that was recovered and returned 34-yards by Mike Tolbert for the score. Each team then traded field goals, Stoyanovich from 19-yards for Indiana and Collin Mackie from 44-yards for Carolina that made the score 20–10 at the end of the third quarter. The Hoosiers then closed the game with a pair of fourth-quarter touchdowns and won 34–10. Points were scored on an 88-yard, Rob Turner touchdown reception from Dave Schnell and an eight-yard Thompson run. Dave Schnell was named the MVP of the game as he completed 16 of 31 passes for 378 yards and two touchdowns.