After reestablishing itself as a playoff contender in the past season, the team set high expectations for itself. A much challenging year was foreseeable because the "We Believe" generation of Warriors have already gotten attention of the whole league. Shooting guard Jason Richardson was also traded to the Charlotte Bobcats for rookie Brandan Wright. To make things harder, Stephen Jackson received a 7-game suspension for his firearm incident. The absence of Jackson hurt the Warriors, as the team opened the season with six straight losses. Things immediately turned around with Jackson's return. The Warriors quickly fought back into playoff position. Monta Ellis' rise, Baron Davis' solid injury-free season (21.6 points, 8 assists, 4.6 rebounds per game),[9] and an overall improvement in chemistry, led to the good play of the team after the Jackson's return. It was the first time the Warriors had three players average 20 points per game since the T-M-C era (Davis at 21.7, Ellis at 20.7, Jackson at 20.1).

On January 29, 2008, the Warriors signed Chris Webber for the rest of the season. But the Warriors offense was too fast for Webber and he ended up playing only nine games, averaging 3.9 points and 3.6 rebounds in 14 minutes per game before been waived on March 25, 2008. Webber announced that he is officially retired from basketball due to persistent problems with his surgically repaired knee. On April 14th, 2008, the Warriors were officially eliminated from the 2008 Western Conference Playoffs, after losing to the Phoenix Suns 122–116 in Phoenix, despite having 48-34 season. The Warriors sold out nearly every home game during the season averaging 19,631 per game, the highest in team history.

On June 30, 2008, Baron Davis opted out of his contract with Golden State. He had $17.8 million dollars left in his contract. On Golden State offered Gilbert Arenas a 5 year contract, worth more than $100 million dollars to replace Davis. However, the contract was beat by the Washington Wizards who re-signed him with a 6 year, $111 million dollar contract.