There were two changes to the membership of the VFL for the 1998 season: the Bendigo Diggers were admitted and the Traralgon Maroons departed. The Preston Knights were excluded from the league in October 1997, but were reinstated the following month. Strategically, the Victorian State Football League desired to fully align the VFL with the statewide under-18s competition, with twelve clubs in each competition and one VFL clubs aligned with each TAC Cup club, and the changes were in large part driven by these motivations.
Bendigo
At this time, there were two regional TAC Cup clubs with no VFL affiliate: the Bendigo Pioneers and the Murray Bushrangers. In early 1997, the VSFL granted a licence to the Bendigo Football Club to enter a team from the 1998 season and to be aligned with the Pioneers. The club was newly established, unlike the VFL's other two regional teams – North Ballarat and Traralgon – who had been strong clubs in their local competitions. The club wore blue and gold and took the nickname Diggers.
Traralgon
As a condition of its entry to the VFL in 1996, Traralgon had always intended to allow the members another vote on whether to stay in the VFL or return to the Latrobe Valley Football League after two seasons. In those first two seasons, Traralgon had achieved little on-field success ; off-field, its average home crowd of 1,200 was among the best in the league, but its finances were stretched due to extra travel and difficulties attracting the necessary sponsorship. There was division within the Traralgon board, with different news reports indicating the board recommending staying or leaving. Ultimately, when the vote took place at the end of November 1997, the members voted in favour of departing, and the club returned to the LTFL. Less than a day after Traralgon's departure was announced, a new group which included some members of the Traralgon board formed a new Gippsland Powersenior football club board and applied to join the VFL as a replacement for Traralgon, but this never eventuated and the VFL has since remained without Gippsland representation.
Preston
On 21 October 1997, the VSFL announced that it would not grant Preston a VFL licence for the 1998 season. As had been the case with the attempted expulsion of Werribee two years earlier, the decision came from the VSFL's desire to reduce the number of metropolitan teams from nine to eight to align it with the eight TAC Cup clubs from the greater Melbourne and Geelong region. It was intended that the Northern Knights TAC Cup team would be reallocated from Preston to Port Melbourne, and that the Geelong Falcons TAC Cup team would be reallocated from Port Melbourne to Werribee. The VSFL had reportedly debated whether Preston or Coburg would be the eliminated club, with the latter retained largely due to its superior playing facilities. Preston had been struggling through the 1990s, with no on-field success and difficulty retaining players, and it had courted former VFA club Prahran during the year to consider an administrative merger to help its finances. Nevertheless, it fought to regain its licence, and in a meeting on 8 November it obtained agreement from the VSFL to delay its final decision and allow the club time to campaign for reinstatement. Over the subsequent weeks, the club gained the support of the Darebin Council to upgrade its Preston City Oval facilities. Ultimately, it was Traralgon's departure at the end of November that had the most significant part to play in Preston's licence being reinstated. With no Gippsland-based team to serve as Gippsland Power's affiliate, the VSFL was faced with the prospect of having to align the Power with a metropolitan club, which would remove the need to eliminate the ninth metropolitan club. In moves which took place before 1999, Gippsland Power was allocated to Springvale; the Oakleigh Chargers were reallocated from Springvale to Port Melbourne; and the Geelong Falcons were reallocated from Port Melbourne to Werribee. Preston then remained in the league as the Northern Knights' affiliate.
Premiership season
Ladder
Finals
Grand Final
Awards
The leading goalkicker for the season for the second consecutive season was Shayne Smith, who kicked 78 goals.
The J. J. Liston Trophy was won by Michael Frost. Frost polled 32 votes, which as of 2019 holds the record for the most votes since the modern voting method was adopted in 1982.
North Ballarat won the reserves premiership. North Ballarat 14.9 defeated Frankston 6.4 in the Grand Final, held as a curtain-raiser to the Seniors Grand Final on 20 September.
