Hopes were high at Burnden Park in May 1978 when Bolton sealed the Second Division title and gained promotion to the First Division. However, they only remained there for two seasons before being relegated.
Following relegation in 1980, Bolton signed former Manchester United European Cup winning striker Brian Kidd from Everton for £150,000 as they prepared to challenge for a quick return to the First Division. Kidd scored a hat-trick in his third game for Bolton, a 4–0 win over Newcastle United in the league, but the rest of the season was a struggle as Bolton failed to finish anywhere near the promotion places. Manager Stan Anderson was sacked at end of the season and replaced by coach George Mulhall. By the end of the 1981–82 season, Bolton were no closer to promotion and had lost several key players including Peter Reid and Neil Whatmore. There were then rumours that Brazilian legend Pele would be appointed to take over from George Mulhall as manager, but the job went to John McGovern (a European Cup winner with Nottingham Forest) who became Bolton's first player-manager.
However, the appointment of McGovern as manager was not the turning point that everyone at Burnden Park had hoped it would be, and in 1983 Bolton were relegated to the Third Division after losing 4–1 at Charlton Athletic on the final day of the season.
McGovern remained in charge for the 1983–84 season, and for a while it looked as though he was the man to turn things around as his predominantly young team did well in the Third Division. An 8–1 win over Walsall that season was Bolton's best league win for 50 years, but in the end Bolton failed to win promotion. McGovern then made way for new manager Charlie Wright, who remained in charge until December 1985.
At the end of the 1986–87 season, Bolton Wanderers suffered relegation to the Fourth Division for the first time in their history. But the board kept faith in manager Phil Neal (who was appointed in December 1985) and they won promotion back to the Third Division at the first attempt. The deciding goal was scored by Robbie Savage in a thrilling 1–0 win at Wrexham. Wrexham missed a penalty in the opening 30 minutes and both teams squandered a succession of chances. Bolton's Robbie Savage hit the post from a free kick before the referee blew the final whistle. It was during Neal's reign at manager that Nat Lofthouse was appointed lifetime President of the football club. Neal won the Sherpa Van Trophy in 1989 and remained in charge until the summer of 1992 when he made way for Bruce Rioch, who a few years earlier had won two successive promotions with Middlesbrough. His penultimate season (1990–91) saw Bolton pipped to the final automatic promotion place by Southend United and lose to Tranmere Rovers in the playoff final, but his final season saw them finish a disappointing 13th.
In the early part of Rioch's tenure, Bolton gained a giantkilling reputation in cup competitions. In 1993 Bolton beat FA Cup holders Liverpool 2–0 in a third round replay at Anfield, thanks to goals from John McGinlay and Andy Walker. The club also defeated higher division opposition in the form of Wolves (2–1) that year before bowing out to Derby County (3–1). Bolton also secured promotion to the second tier for the first time since 1983. In 1994 Bolton beat FA Cup holders Arsenal 3–1 after extra time in a fourth round replay, and went on to reach the Quarter Finals, bowing out 1–0 at home to local rivals (and then Premier League) Oldham Athletic. Bolton also defeated top division opposition in the form of Everton (3–2) and Aston Villa (1–0) that year.
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