1992-93 saw the club starring in Division 2, as the creation of the premiership caused a re-labelling of the divisions. With Murray having brought in players such as Dean Emerson, John Gallacher and Ryan Cross the club got off to a great start - by October the team was in 2nd, level on points with leaders West Brom.

The club stayed in the playoff contention until New Year, and then achieved one of the best scores in its history when defeating Crystal Palace 1-0 in the FA Cup third Round - the first occasion that Hartlepool had beaten a top division side. However this would prove to be the end of the club's fine form for several years. It was discovered shortly after the cup win that the club were in financial difficulties. To make ends meet, a number of players were released or sold, and the club set an unenviable record by going 1227 minutes without netting in a goal. During this time Murray was dismissed and replaced by Viv Busby. The club eventually escaped demotion, finishing 16th.

The following season was an unmitigated disaster. With no money to bring in footballers, the team struggled all season. Busby was replaced in November 1993 by John MacPhail, but he could do little as the team remained in the relegation places from November until the end of the season. Relegation was assured following a 7-0 defeat at Rotherham; the final day of the season saw the team thrashed 8-1 by Plymouth at the Victoria Ground.

The next five seasons saw constant struggle and a succession of managers. the club finished in 18th, 20th (twice) and 17th, during those years.