Miami came into the game #1 and Penn State #2. In a move that would come to symbolize the game for years to come, Miami arrived wearing combat fatigues while Penn State arrived wearing suits and ties.
Despite all the hype surrounding Miami, Penn State forced Heisman trophy winner Vinny Testaverde to throw five interceptions, including one in the end zone with 18 seconds left, winning the game for the Nittany Lions.
Oklahoma and Michigan began the season at #1 and #2. A 28–16 defeat of Oklahoma by Miami on September 27 pushed Miami into the #1 ranking. Alabama moved into the number 2 spot. Probably the strongest case for Penn State was a defeat of a well-regarded #2 ranked Alabama team 23–3 at Tuscaloosa on October 26. This pushed Penn State into the number two spot. Otherwise, both Miami and Penn State had a number of teams on their schedule that were not strong opponents. Michigan defeated Iowa in a rematch of the previous season's #1-#2 Iowa game. Three games later, Michigan was number 2 and undefeated after Penn State fell in the ranksings following a 17–15 close win to Maryland.
Arizona State Sun Devils quarterback Jeff Van Raaphorst threw five interceptions in a 21–21 tie with Washington State ASU's 16-9 win over the UCLA Bruins in the Rose Bowl stadium on October 4 would later prove to be the deciding game in the conference. The Sun Devils beat both USC and UCLA in Los Angeles, the first Pacific-10 conference team to do so. The Sun Devils defeated outgoing coach Joe Kapp's California Golden Bears team 49–0. Kapp had unzipped his pants in front of the Seattle media following an embarrassing 50–18 loss against Washington on October 4. The win over Cal, combined with the UCLA loss to Stanford, enabled the Sun Devils to clinch the Rose Bowl Berth on November 8. The early clinching of the Rose Bowl bid for Arizona State began a scramble for all the Bowl games to confirm teams before the bids were to be extended on November 22.
The Michigan Wolverines football team began the season ranked number 2 in the nation. A #1 vs #2 matchup the previous season between Iowa and Michigan decided the race for the 1986 Rose Bowl. The Wolverines defeated Iowa 20–17. Minnesota was regarded as an easy victory as a 25-point underdog to number two ranked Michigan. The Gophers had not defeated the Wolverines since 1977. With two minutes to go, and Michigan just having scored a touchdown to bring the Wolverines at 16 to the Gophers 17, Bo Schembechler called for the extra point to be kicked for the tie. Minnesota quarterback Rickey Foggie scrambled to put Chip Lohmiller in position to get the winning field goal. The Gophers took home the Little Brown Jug from Michigan for the first time since 1962. The Wolverines fell to #6 and then faced arch rival Ohio State for the right to play in the Rose Bowl. Jim Harbaugh guaranteed a Michigan Victory over Ohio State. "We don't care where we play the game," said the senior quarterback early in the week. "I hate to say it, but we could play it in the parking lot. We could play the game at 12 noon or midnight. We're going to be jacked up." The Wolverines won 26–24.
With Arizona State having clinched the Rose Bowl berth on November 8, and the Fiesta Bowl and Citrus Bowl scrambling to bid for the #1 Miami (Florida) vs. #2 Penn State Game, the Cotton Bowl Classic struck an agreement to take the loser of the Michigan-Ohio State game. All the bowl games attempted to line up participants before the official bids were extended on November 22. The Sugar Bowl agreed to take the loser of the Oklahoma-Nebraska game to match the SEC winner, and the Orange Bowl agreed to take the second place SWC team to match the Big 8 winner. The Citrus Bowl, which moved to January 1, got a second place SEC team in Auburn, and, what they hoped would be a good matchup, in 7-2 USC. The Trojans would lose to UCLA and Notre Dame after they were invited.
↑Looney, Douglas S. - A Midseason Run For Respect. Penn State made believers out of 'Bama and gave two minor bowls major hopes for New Year's Day. Sports Illustrated, November 3, 1986.
↑Reilly, Rick - It Only Hurts For A Little While. Just ask Cincinnati or any number of other college football have-nots who, week after week, are willing to serve as fodder for powerhouses like Miami and Penn State, most of whom have discovered that a prerequisite for a trip to the top of the polls—and into a major bowl game—is a cream-puff schedule. Sports Illustrated, November 24, 1986
↑ 5.05.15.2Reilly, Rick - Coming Out Of The Desert Darkness With The Sun Devils. Sports Illustrated, November 17, 1986
↑ 6.06.1Neff, Craig - Bo Tries On A Tie, Gets A Boot. Sports Illustrated, November 24, 1986
↑ 7.07.1Hersch, Hank - Short On Style, But Plenty Long On Substance. Sports Illustrated, December 1, 1986