During the 1880/81 season the Midland Counties Football Union's committee decided that from the following season, 1881/82, five years after the idea had been suggested in the correspondence columns of Aris's Birmingham Gazette, a knockout compeition to be known as the MIdland Counties Challenge Cup would be launched.
Having gone through the previous season without sustaining a defeat Moseley were amongst the favourites to win the cup even though they had lost the services of two of their star players Tyler and Breeden. Burton also had a strong side and The Nuneaton Advertiser, for one, ‘had little doubt that the cup will be eventually carried off by one of these two clubs, Moseley for choice.’ In a foretaste of recent events Rugby did not enter the competition ‘owing to lack of funds’ which had caused them to fall from the position that they were in three seasons previously ‘when they possessed a fifteen that was a match for any club in the Midlands not even excepting the Moseley Club’. The first round matches were all staged on 22nd October 1881.
One of the main attractions of the competition was that clubs would be drawn against teams that they did not usually play and this was exactly what happened in the first round when Moseley were drawn at home to Kettering. The match was played in miserable conditions on a heavy ground, which made it difficult to handle the ball. Having lost the toss the home side played uphill and against the wind in the first half which was very even with Moseley touching down in self-defence twice and Kettering once. Once the teams had changed ends, however, Moseley soon gained the upper hand and two minutes into the new half Denston Gibson scored an unconverted try for the home side. Shortly afterwards Lea scored another try for Moseley which Albert Smith converted. Williamson then scored a brace of tries, the first of which was converted. This score was followed by a left-footed dropped goal by Smith and shortly before no side Milner scored another try for Moseley which Smith converted. In addition to these scores Kettering had also touched down in self-defence six times during the half. The result was thus a Moseley victory by three goals, one dropped goal, two tries and seven touchdowns to two touchdowns.
The second round of the inaugural Midland Counties Challenge Cup took place on the weekend immediately following the first round. Moseley were drawn at home against the other cup favourites Burton, a club that they had not played for nearly two years, and such was the interest in the clash that around 1,000 spectators attended. The home side kicked off downhill and shortly afterwards Smith scored a try which he converted himself. Within ten minutes Moseley went further ahead through unconverted tries by Hasluck and Milner. Burton tried hard but could not breach the Moseley defence and before half time the home side had added two more tries, by Breeden and Williamson. In the second half, with Burton having the advantage of the slope, play was much more even, however, Moseley still managed a further try by Reeve which was converted by Albert Smith. The home side thus won by two goals, four tries and six touchdowns to nil.
In the third round or as it would be termed today the semi-finals Moseley were drawn against Trinity College, Stratford-on-Avon, however, Moseley were given a walkover into the final, arriving there having only played two matches unlike their opponents, Leamington Rovers, who had to play four matches to reach the final stage of the competition.
The final was staged, on 1st April 1882, at Coventry, although this was not originally intended to be the venue ‘but in consequence of some mismanagement on the part of the company [the owners of the Aston Lower Grounds] the ground had also been let to the Birmingham [Football] Association’. In order to overcome this difficulty the association committee awarded the sum of £10 to the union as compensation for the loss of the ground. Moseley were strong favourites to lift the trophy having been unbeaten during both the current and previous seasons and having beaten Leamington Rovers twice in the course of the season now concluding.
Around two thousand spectators witnessed the match, a crowd which Bell’s Life in London thought would have been considerably larger if the final had been, as originally planned, played at the Aston Lower Grounds. Play commenced at 3.30 p.m. when Leamington kicked off 'from the pavilion end'. Following the opening exchanges Moseley forced their opponents to twice touch down in self-defence before the Rovers ‘played with a little more determination’. As the half advanced, however, Moseley began to get on top and from a passing movement Denston Gibson scored a try which Albert Smith converted. Immediately afterwards Williamson secured another try which Smith was unable to convert. There were no further scores before half time although G. Fowler almost secured another try for Moseley but Leamington managed to stop him ‘in a manner which called forth loud applause.’
Immediately after the start of the second half after another passing movement Moseley scored another try which Smith converted. H.V. Hasluck then made ‘two brilliant runs’ one of which resulted in a further unconverted try for Moseley. There then followed a period of more even play before Moseley secured another try which was converted by Smith. Leamington Rovers were then forced to again touch down in self-defence before Moseley scored a final try which F. Fowler was unable to convert. Thus at no-side Moseley had won the inaugural Midland Counties Challenge Cup by a score of three goals, three tries and six touchdowns to nil.
The Leamington Spa Courier reported that there could be no doubt that the best team had won due to their 'fast, unfailing tacklers' and their 'art of passing in a manner which places them well among the first teams of the country.' On the debit side the newspaper reported that Moseley had a tendency ‘to lurk off-side’ and to employ ‘somewhat rough handling’ to weaken their opponents. The same newspaper opined that Leamington Rovers ‘did not play up with the dash that usually characterises them’ and that this may have been due to the injuries sustained in the semi-final against Rushden which had taken place on the previous weekend.
 A touchdown was scored when a side was forced to ground the ball in self-defence in its on in goal area.
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