Colchester's league and FA Cup form contrasted during the 1967–68 season. A trip to
Torquay United in the first round of the Cup saw the U's earn a replay at home, where they won 2–1. Essex rivals
Chelmsford City were beaten 2–0 in the second round, a joint–best result for the campaign for Colchester.
Layer Road then played host to
First Division West Bromwich Albion in front of a crowd just short of 16,000. With the score at 1–1, both goalscorer
Reg Stratton and
John Mansfield had goals ruled out for infringements late on as the tie went to a replay. The U's lost 4–0 at
The Hawthorns to the eventual Cup winners. With the attention on Colchester's cup run, their league form had dropped significantly. After challenging for the promotion positions, Colchester lost 15 of their remaining 22 games after Boxing Day, winning just once. A new all-time record low attendance of 2,483 watched the final day 5–1 defeat by
Peterborough United at Layer Road. With Colchester relegated, and their third relegation in eight seasons, manager
Neil Franklin was sacked two days after the season-ending defeat to Peterborough. ==Players==