Ups and Downs

In 1978, West Ham were again relegated to Division Two, but Lyall was retained as manager and led the team to an FA Cup Final win against Arsenal in 1980. This is notable because no team outside the top division has won the trophy since that time. West Ham were promoted to Division One in 1981, and finished in the top ten of the first division for the next three seasons, before achieving their highest ever league finish of third in 1985/86. However, they were relegated again in 1989. This second relegation resulted in John Lyall's sacking, despite the fact that that stay in Division One saw West Ham achieve their highest-ever placing in the top division, finishing 3rd in 1986.

After Lyall, Lou Macari briefly led the team, though he resigned after less than a single season in order to clear his name of allegations of illegal betting whilst manager of Swindon Town. He was replaced by former player Billy Bonds. In Bonds' first full season (1990–91), West Ham again secured promotion to Division One. The following season they were again relegated to Division 2, which had been renamed Division One as part of the league realignments surrounding the creation of the FA Premier League in 1992. West Ham spent the 1992–93 season in Division One. finishing second and returning to the Premier League in May 1993.

After the 1993–94 season, Bonds quit and was replaced by Harry Redknapp in August 1994. He led West Ham to fifth place in the 1998–99 season, but missed automatic qualification for the UEFA Cup, and instead qualified as winners of the Intertoto Cup. Despite consolidating the league placings for a handful of seasons, a disagreement with the board of directors during the close of the 2000–01 season led to Redknapp being replaced by Glenn Roeder, promoted from youth team coach.

In Roeder's first season the team finished seventh, but West Ham lost by wide margins in several matches (7–1 to Blackburn, 5–0 to Everton and 5–1 to Chelsea) The subsequent season started badly and eventually resulted in relegation. West Ham's tally of 42 points is the highest by any team relegated from the Premier League in a 38 game season. Roeder, who had missed some of the season after being diagnosed with a brain tumour that was treated) was sacked on 24 August 2003, three games into the Championship campaign.

Trevor Brooking (who served as manager during Glenn's ill health the previous season) stepped in as interim manager before being replaced by Alan Pardew in October 2003, headhunted from fellow promotion contenders Reading. Pardew led the team to a playoff final, though they were beaten by Crystal Palace. The club stayed in Division One (which at this time became the Championship) for another season, when they again reached the playoff final, but this time won, beating Preston North End 1–0, gaining re-entry to the Premier League.