An astounding trade was announced in August of 1988: The Edmonton Oilers sent Wayne Gretzky, Mike Krushelnyski, and Marty McSorley to the Los Angeles Kings for Jimmy Carson, Martin Gelinas, first-round draft choices in 1989, 1991, and 1993, and $15 million. The Kings improved by 23 points in the standings to vault over the Oilers into second place in the Smythe Division, behind the Calgary Flames.
Gretzky regained the Hart Trophy as the league's MVP, although Pittsburgh's Mario Lemieux was the NHL scoring leader for the second straight year. Gretzky and Lemieux tied for the league lead in assists with 114, but Lemieux scored 85 goals to 54 for Gretzky.
The Flames led the league with 117 points, 2 ahead of the Montreal Canadiens, who finished first in the Adams Division. No other team had more than 100 points. The Washington Capitals led the Patrick Division with 92, while the Detroit Red Wings had 80 points to finish 2 ahead of the St. Louis Blues in the Norris Division.
The Kings beat the Oilers in the first round of the playoffs, but were then swept by the Flames in the division finals. The Flames then beat the Chicago Blackhawks in five games to advance to the finals. Chicago, the fourth-place team in the Norris, had upset the Red Wings and St. Louis to reach the conference championship series.
The Canadiens lost only three games while eliminating the Hartford Whalers, Boston Bruins, and Philadelphia Flyers to get into the Stanley Cup finals.
The Flames won Game 1, but Montreal won the second game at Calgary and then took a double-overtime victory at home for a 2-1 edge. However, the Flames won the next three in a row. Their 4-2 victory in Game 6 was the first time the Canadiens had ever lost a Stanley Cup-deciding game at home.
Calgary's Al MacInnis, the first defenseman ever to lead the playoffs in scoring, won the Conn Smythe Trophy as the MVP of post-season play.