Urawa Red Diamonds were the title holders, but they were unable to defend their title as they finished seventh in the 2017 J1 League and were eliminated in the fourth round of the 2017 Emperor's Cup, thus did not qualify for the tournament. It marked the second season in a row without title holders after Jeonbuk Hyundai Motors were disqualified in 2017 as a result of their involvement in a match-fixing scandal in 2016.
The AFC Competitions Committee proposed a revamp of the AFC club competitions on 25 January 2014, which was ratified by the AFC Executive Committee on 16 April 2014. The 46 AFC member associations (excluding the associate member Northern Mariana Islands) are ranked based on their national team's and clubs' performance over the last four years in AFC competitions, with the allocation of slots for the 2017 and 2018 editions of the AFC club competitions determined by the 2016 AFC rankings (Entry Manual Article 2.2):
In each region, there are four groups in the group stage, including a total of 12 direct slots, with the 4 remaining slots filled through play-offs.
The top 12 associations in each region as per the AFC rankings are eligible to enter the AFC Champions League, as long as they fulfill the AFC Champions League criteria.
The top six associations in each region get at least one direct slot in the group stage, while the remaining associations get only play-off slots (as well as AFC Cup group stage slots):
The associations ranked 1st and 2nd each get three direct slots and one play-off slot.
The associations ranked 3rd and 4th each get two direct slots and two play-off slots.
The associations ranked 5th each get one direct slot and two play-off slots.
The associations ranked 6th each get one direct slot and one play-off slot.
The associations ranked 7th to 12th each get one play-off slot.
The maximum number of slots for each association is one-third of the total number of eligible teams in the top division.
If any association gives up its direct slots, they are redistributed to the highest eligible association, with each association limited to a maximum of three direct slots.
If any association gives up its play-off slots, they are annulled and not redistributed to any other association.
For the 2018 AFC Champions League, the associations are allocated slots according to their association ranking published on 30 November 2016, which takes into account their performance in the AFC Champions League and the AFC Cup, as well as their national team's FIFA World Rankings, during the period between 2013 and 2016.
Kuwait (KUW): Kuwait could not enter due to FIFA's suspension of the Kuwait Football Association at the entry deadline. (Even if its suspension were lifted, Kuwaiti clubs would not enter since Kuwait did not implement club licensing system.)
Saudi Arabia (KSA): Saudi Arabia had only two entries as Al-Nassr and Al-Ittihad, the 2016–17 Saudi Professional League 3rd place and 4th place, which would have entered the group stage and qualifying play-offs respectively, failed to obtain an AFC licence, and no other teams below them in the league were eligible to replace them, as all other licensed teams from Saudi Arabia finished in the bottom half of the league and did not meet the sporting criteria (Entry Manual 12.6).
The following 46 teams from 20 associations entered the competition.
In the following table, the number of appearances and last appearance count only those since the 2002–03 season (including qualifying rounds), when the competition was rebranded as the AFC Champions League.
United Arab Emirates (UAE):Al-Ahli, the 2016–17 UAE Pro-League 3rd place, merged with Al-Shabab and Dubai to form Shabab Al-Ahli Dubai after the 2016–17 season, and were excluded from the AFC Champions League for failing to be in existence for the necessary three year requirement. As a result, Al-Ain, the league 4th place, entered the qualifying play-offs (initially they failed to obtain an AFC licence but later won their appeal).
In the qualifying play-offs, each tie was played as a single match. Extra time and penalty shoot-out were used to decide the winner if necessary (Regulations Article 9.2). The eight winners of the play-off round advanced to the group stage to join the 24 direct entrants. All losers in each round from associations with only play-off slots entered the AFC Cup group stage.
The bracket of the qualifying play-offs for each region was determined by the AFC based on the association ranking of each team, with the team from the higher-ranked association hosting the match. Teams from the same association could not be placed into the same play-off.
The draw for the group stage was held on 6 December 2017, 16:30 MYT (UTC+8), at the AFC House in Kuala Lumpur, Malaysia. The 32 teams were drawn into eight groups of four: four groups each in the West Region (Groups A–D) and the East Region (Groups E–H). Teams from the same association could not be drawn into the same group.
In the group stage, each group was played on a home-and-away round-robin basis. The winners and runners-up of each group advanced to the round of 16 of the knockout stage.
The teams were ranked according to points (3 points for a win, 1 point for a draw, 0 points for a loss). If tied on points, tiebreakers were applied in the following order (Regulations Article 10.5):
Goals scored in head-to-head matches among tied teams;
Away goals scored in head-to-head matches among tied teams;
If more than two teams are tied, and after applying all head-to-head criteria above, a subset of teams are still tied, all head-to-head criteria above are reapplied exclusively to this subset of teams;
Goal difference in all group matches;
Goals scored in all group matches;
Penalty shoot-out if only two teams are tied and they met in the last round of the group;
Disciplinary points (yellow card = 1 point, red card as a result of two yellow cards = 3 points, direct red card = 3 points, yellow card followed by direct red card = 4 points);
In the round of 16, the winners of one group played the runners-up of another group from the same region, with the group winners hosting the second leg, and the matchups determined by the group stage draw.
The draw for the quarter-finals was held on 23 May 2018. In the quarter-finals, the four teams from the West Region played in two ties, and the four teams from the East Region played in two ties, with the matchups and order of legs decided by draw, without any seeding or country protection.
In the semi-finals, the two quarter-final winners from the West Region played each other, and the two quarter-final winners from the East Region played each other, with the order of legs determined by the quarter-final draw.
In the final, the two semi-final winners played each other, with the order of legs (first leg hosted by team from the East Region, second leg hosted by team from the West Region) reversed from the previous season's final.