The Magic started the 2007-08 NBA Season with an impressive 16–4 record in their first 20 games, which included wins over the Boston Celtics and Cleveland Cavaliers. Through the next few months, the Magic were not so successful, splitting their next 36 games with 18 wins and 18 losses.

Dwight Howard was voted as starting center at the 2008 NBA All-Star Game in New Orleans, Louisiana, where the previous night, he won the 2008 Slam Dunk Contest.

At the start of March, the Magic seemed to pick up speed again, finishing the month with 10 wins, the first time since November that they won 10 or more in a month. The Magic clinched the Southeast Division title when the Washington Wizards were routed at Utah 129-87 on March 31, 2008. It was the Magic's third division title, but only their first since 1995-96 season, as well as their first since the Southeast Division was formed. They also won their 50th game against the Chicago Bulls on April 13, which had not happened since the 1995-96 season. The Magic finished the regular season 52–30, their best season since 1995-96. With the 3rd seed in the Eastern Conference, they will be matched up in their first round playoff series against the Toronto Raptors. The Magic will have home court advantage for the first time since the 1998-99 season.

On April 28, 2008, at Amway Arena, the Magic eliminated the Raptors with a 4-1 series victory in the first round. It was the first playoff series victory for the Magic in 12 years after 6 straight first round exits. The run of success didn't last long as they fell 4-1 to the Detroit Pistons in the second round. With the Magic already down in the series, controversy erupted after the Pistons' Game 2 victory. At the conclusion of the 3rd quarter, Chauncey Billups of the Pistons made a three point shot giving the Pistons a three point lead. However, the clock had stopped just as the play began. NBA rules prohibit officials from using instant replay or any timing device to determine how much time has elapsed when a clock malfunctions, nor is a replay allowed to be viewed from the time of the malfunction to when the play ends, when the game clock has not expired. Because of the rule, the officials then estimated that the play took 4.6 seconds, and because there were 5.1 seconds remaining when play began, the field goal was allowed to be counted. The NBA later admitted that the play actually took 5.7 seconds and the basket in question should not have counted. The Pistons went on to win Game 2. The Magic were able to win Game 3, with the Pistons' Chauncey Billups out for most of the game with an injury, but were unable to take advantage of his absence in Games 4 and 5 and defeat the Pistons, which ended the Magic's playoff run in 2008.