The 2016–17 season was the club's second consecutive in the fourth tier of the English football league system, it was Darren Way's first full season in charge as manager. After winning their opening game, Yeovil lost six of their next seven matches leaving them in the relegation zone in September before an improved run of form, including eight matches unbeaten saw the club rise into the play-offs after a 5–0 victory against Crawley Town in December 2016. This though was the highpoint of the season as Yeovil only won three of their final 27 matches as the club slid dangerously towards the relegation zone, but safety was confirmed with one match to spare as Yeovil finished the season in 20th place. In cup competitions, Yeovil were knocked out in the first round of the FA Cup, losing to non-league side Solihull Moors in a replay, while the Glovers progressed to the second round of the EFL Cup losing to Premier League side Everton. The club also reached the quarter-finals of the revamped EFL Trophy, losing to Luton Town.

The end of the season saw Way release six players, including, Ollie Bassett, Tom Eaves, Brandon Goodship, Alex Lawless, Joe Lea and captain Darren Ward. Nine players were offered new contracts by Darren Way, defender Nathan Smith agreed a new one year contract, while forward François Zoko, winger Otis Khan, defenders Bevis Mugabi, Thomas James and keeper Jonny Maddison also agreed new two-year contracts. Midfielder Kevin Dawson rejected the offer of a new contract to sign for fellow League Two side Cheltenham Town and reunite with former manager Gary Johnson. Defender Alex Lacey rejected the club's offer of a new two-year contract and signed for League One side Gillingham. Meanwhile midfielder Matthew Dolan rejected the club's offer to sign for fellow League Two side Newport County.

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