2006-2007 (4th in Serie A, Won UEFA Champions League)

Milan's Serie A campaign began with the aforementioned -8 points penalty resulting from the Caliopoli Scandal. After a lackluster first half of the season which saw Milan hover at the center of the standings, several January transfers (including World Cup member Massimo Oddo, and Brazilian legend Ronaldo) reinvigorated the club. By the end of the campaign, Milan surged up the table to finish fourth, thus assuring their participation for the 2007-08 UEFA Champions League.

While their Serie A campaign proved moderately successful, the 2006-2007 season is best remembered for the team's performance in the Champion's League. The penalties imposed after the Calciopoli scandal resulted in Milan being seeded third in the final 2005-06 Serie A table. Thus the team was forced to play in the Champion's League Qualifers against former European champion Red Star Belgrade. Milan were victorius in the qualifier and advanced to the group phase which they would eventually win.

A.C. Milan starting lineup against Liverpool F.C. in Athens.

Milan survived a first round fight, defeating Celtic (eventual champions of the Scottish League) 1-0 on aggregate after an extra time goal by Kaká. Milan would go on to defeat European giant FC Bayern Munchen 4-2 on aggregate (2-2 at San Siro and 2-0 at Allianz Arena).

With the win over Bayern, Milan was propelled to the Champions League semi-finals. This marked the third consecutive and fourth time in five years that AC Milan has reached the final four of the competition. The first leg of the semi-final was played against Manchester United at Old Trafford. Manchester scored early on a goal from Cristiano Ronaldo, but Milan answered back thanks to a brace from Kaká, taking a 1-2 lead at half time. Manchester United would ultimately prove victorious thanks to two 2nd half goals from striker Wayne Rooney. This match was regarded by the media and UEFA President Michel Platini as the greatest match in recent memories.^{[citation needed]} The second leg of the Semi Final was played at San Siro on 2 May. Milan played a near perfect first half taking a 2-0 lead into halftime with goals from Kaká and Clarence Seedorf. A 78-minute goal by Alberto Gilardino sealed the victory for the home side.

Milan advanced to the UEFA Champions League final, pitting them in a rematch against their 2005 finals opponent Liverpool FC. The match was played at the Olympic Stadium in Athens, Greece, on 23 May 2007, with Milan prevailing 2-1 with both goals coming from Filippo Inzaghi. With the victory, the club affirmed its status as one of the powerhouses of European football, with three European Cup final appearances in five years, including two victories.