The Town did not manage to recreate their glory days of ten years before and were unable to make a challenge for the title. In fact, they suffered relegation to Division Two where they had to ply their trade against a string of Welsh sides for two seasons before fighting their way back just before the Great War. 

After hostilities ceased, the Southern League, en bloc, was asked to form a new Division Three of the Football League and the Town then enjoyed 17 seasons at this level mostly as a 'middle of the road' club. With the population growth of the town and surrounding area, the board, in the mid-1930s, decided to make a concerted bid to achieve a higher status.

Players were brought in to help them achieve this objective and their highest ever position was achieved in 1936 when they finished runners-up to Coventry in the days when only one side was promoted. During this campaign, a wing-half, Joe Payne, was handed his debut at centre forward against Bristol Rovers and he altered the record books at a stroke when scoring 10 goals in a 12-0 victory. Payne continued into the next season as he left off the last and it was his remarkable 55 goals out of a total of 103 that helped secure promotion to Division Two on the back of a tremendous home record.

Decisions were immediately taken to extend the Kenilworth Road ground, where the Town had moved in 1905, with the capacity increased to a supposed 34,000. This limit was never seriously tested as the Town held their own in the new higher sphere. In their second season in Division Two, however, a strong and settled squad, ably led from the front by local boy Hugh Billington, nearly achieved promotion to the top flight.

Over Easter 1939, a series of good results had forced the team into the promotion positions, but a draw and two defeats from the final three games meant that they missed out. Unfortunately, no-one will ever know how far this squad could have progressed as in September 1939, with the Town sitting proudly at the top of the table, war broke out.