Mumbai City FC finished first in the standings at the end of the 2016 ISL league stage, thus qualifying for the semifinals for the very first time led by Diego Forlán who was their marquee player. However they lost in the semifinals to Atlético de Kolkata 3–2 on aggregate. Coach Alexandre Guimarães was thus retained for his 2nd term in-charge as the head coach of the club.

Due to the Indian Super League regulation each club was allowed to retain a maximum of two Indian players over the age of twenty-one (21) from previous squad. On 1 July, Mumbai City announced they are retaining goalkeeper Amrinder Singh. Franchise announced retention of defensive midfielder Sehnaj Singh on 7 July. It was officially announced on 24 July that midfielder Rakesh Oram was retained by Mumbai City as U21 player.

In ISL players draft held on 23 July 2017, Mumbai City picked defender Aiborlang Khongjee who was loaned out to the franchise by Shillong Lajong in previous season. Mumbai City added eleven new players from draft, goalkeeper Arindam Bhattacharya and Kunal Sawant, defender Biswajit Saha, Mehrajuddin Wadoo and Lalchhawnkima, midfielder Abhinas Ruidas, Sahil Tavora, Sanju Pradhan and Zakeer Mundampara and forward Balwant Singh and Pranjal Bhumij. Defender Raju Gaikwad made his return who was previously part of Mumbai City squad in 2014 season.

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