The 1896–97 season was the third in the history of the Southern League. Southampton St.Mary's won the Division One championship. Millwall Athletic and Tottenham Hotspur applied for election to Football League. However, they were not elected so were allowed to play in the Southern League.

Division One

Division One featured seven teams from previous season and five new clubs: two promoted from Division Two and three newly elected members. Teams promoted from Division Two: Newly promoted teams:

Division Two

Division Two featured five teams from previous season and eight new clubs, all of which were newly elected. Newly promoted teams:

Promotion-relegation test matches

At the end of the season, test matches were held between the bottom three clubs in Division One and the top three clubs in Division Two. Third-placed Freemantle were the only Division Two club to win, but withdrew from the league at the end of season, meaning their defeated opponents Northfleet remained in Division One.

Football League elections

Only one Southern League club, Millwall Athletic, applied for election to Division Two of the Football League. However, they received only one vote and were not elected.