However, hope and redemption appeared to be on the horizon for the Hawks in 2007. With the third pick of the NBA draft, they selected Al Horford from the University of Florida. They also acquired, from the Indiana Pacers, the 11th pick of the draft, which they used to select Acie Law IV from Texas A&M University.

The season started brightly as they won the season opener against the Dallas Mavericks 101–94, sending hope to Hawks fans. In addition, the last time they won a season opener was 1998, the last time the franchise made the playoffs.

But once again, the Hawks organization made dubious headlines when the NBA granted the first appeal of a protested game in 25 years on January 11, 2008. The Miami Heat protested a scoring error during the clubs' December 19, 2007 contest. Due to a communications error, the Hawks official scorer had erroneously assessed a sixth foul on Heat center Shaquille O'Neal with 51.9 seconds remaining in overtime, disqualifying him from the game. The Hawks, who had won that game by a 117–111 margin, were stripped of the victory. On March 8, 2008, both teams replayed the final 51.9 seconds of the game as the Hawks won 114–111. The replay was held after few weeks O'neal had been traded to the Phoenix Suns from the Miami Heat.

Atlanta also lost the regularly scheduled game on January 11, 2008 to fall from the break-even mark to two games below .500 in a span of eight hours.

For the 2007–08 season, the Atlanta Hawks changed their colors and uniforms to navy blue, red and white, which marks the first time since their days in St. Louis that they wore those colors.

On February 16, 2008 Atlanta acquired guard Mike Bibby from the Sacramento Kings in exchange for Anthony Johnson, Tyronn Lue, Shelden Williams, Lorenzen Wright and a 2008 second round draft pick.

On April 14, 2008, despite having a 37–45 record, the Hawks clinched their first playoff berth since the 1998–99 season, and in the first round surprised the favored Boston Celtics, the #1 seed in the Eastern Conference, by playing a strong and competitive playoff series. The Hawks won all 3 games in Philips Arena and pushed the series to seven games, before finally bowing out after losing by over 40 in game 7.

On May 7, 2008 Billy Knight resigned as general manager being effective July 1, 2008. Knight said it was time to "take a break" following a season when his authority appeared to be weakened by unsuccessful lobbying with owners to fire coach Mike Woodson.