The 1968–69 season was Colchester United's 27th season in their history and their first season back in the fourth tier of English football, the Fourth Division following relegation the previous season. Alongside competing in the Fourth Division, the club also participated in the FA Cup and the League Cup. In a transitional season under new manager Dick Graham, Colchester missed an instant return to the third tier by four points, finishing the season in sixth place. The U's were eliminated at the second round of both FA and League Cups.