Personnel-wise, the Hornets stood largely pat heading into the 2007-2008 season. They did however sign free agents Morris Peterson and Melvin Ely, while letting go of former first round draft pick Cedric Simmons. Further, the club extended the contract of reserve guard Jannero Pargo, and selected Kansas forward Julian Wright with the 13th pick in the 2007 NBA Draft.

Healthier than previous seasons, the Hornets stormed to a 29-12 record at the halfway mark. Having the best record in the Western Conference on February 3rd meant that Byron Scott would coach the 2008 Western Conference All-Stars at home in the New Orleans Arena. Scott was joined by two of his players, as both Chris Paul and David West were selected as All-Star reserves. Chris Paul was nominated for NBA MVP 2008 and placed 2nd in voting. On February 21st the Hornets made an in-season trade with the Houston Rockets acquiring swingman Bonzi Wells and backup point guard Mike James for veteran guard Bobby Jackson.

The Hornets completed the regular season with a record of 56-26, marking the season the most successful ever in terms of number of wins. The Hornets also won their first ever division title, winning the Southwest Division ahead of the San Antonio Spurs. Having clinched the 2nd overall seed for the Western Conference, the Hornets beat the Dallas Mavericks in the first round. The Hornets posted decisive wins against the 3rd seed San Antonio Spurs in the first two games of their first ever Western Conference Semi-finals since the move to New Orleans, but eventually lost to the defending champion Spurs 3 games to 4 in a tightly contested series.

The Hornets announced on January 31, 2007 that they would decline to renew an option to continue playing in Oklahoma City under its relocation agreement for a third season. The Hornets franchise returned to New Orleans full-time for the 2007-2008 season, with all 41 home games played in the New Orleans Arena.

League officials had stressed from the beginning the desire for the franchise to return to New Orleans once it proved feasible and that they would make a good-faith effort to assist with the recovery. To that end, the 2008 NBA All-Star Game and its accompanying festivities were awarded to New Orleans and a serious marketing campaign was commenced in February 2007. Subsequently, various corporate sponsorship agreements were signed (under the umbrella of the Crescent City Champions), with Dr Pepper Snapple Group, Capital One, and Cox Communications among them. Attendance at the New Orleans Arena, while tepid at first, picked up considerably in the months of March and April 2008 with the team registering sell-outs in 12 of its last 17 regular season home games, and the final 13 total games (including playoffs). The team has also publicly announced the acquisition of nearly 5,000 new season ticket holders.