The 1996 Alabama squad finished the regular season as the SEC Western Division champions with losses to Tennessee and Mississippi State. Following their victory against Auburn in the Iron Bowl, head coach Gene Stallings announced his retirement effective following the bowl game. One week later, Alabama lost to Florida in the SEC Championship Game, to finish the regular season with a 9–3 record. The following day, university officials announced a bid to play in the Outback Bowl was accepted. The appearance marked the second for Alabama in the Outback Bowl, and their 48th overall bowl game.
The 1996 Michigan squad finished the regular season with losses to Northwestern, Purdue and Penn State to finish with a record of 8–3. Their appearance marked the third for Michigan in the Outback Bowl, and their 28th overall bowl game.
Alabama scored first on a 43-yard field goal from placekicker Jon Brock to take an early 3–0 lead.Remy Hamilton of Michigan answered in the second quarter with 44 and 22-yard field goals to take a 6–3 advantage at the half. In the fourth quarter, Michigan was driving for another touchdown, when Brian Griese threw a pass that was intercepted at the 12-yard line by Dwayne Rudd of Alabama, and returned 88-yards for a touchdown, and a 10–6 Alabama lead.Running backShaun Alexander put the game out of reach with 2:46 left, by running for a 46-yard touchdown run, increasing Alabama's lead to 17–6. Griese threw a 9-yard touchdown pass to Russell Shaw to close the gap to 17–14, but that would be the final score.