In June 2016, it was announced by the SPFL that the Challenge Cup would be expanded to include teams from the Welsh Premier League, Northern Irish Premiership and an under-20s side from each Scottish Premiership club. On the same day as this announcement, the under-20s team coach Ian Durrant was relieved of his duties in a coaching reshuffle, with Rangers appointing Graeme Murty as Head Development Squad Coach on 17 August, to replace him. The draw for the first round of the 2016–17 Challenge Cup was made with Rangers under-20s side paired with Stirling University F.C. who play in the Lowland Football League. The U20 side progressed conformably beating Stirling University 4–0 at Forthbank Stadium with Josh Jeffries scoring a brace. A second round tie with Scottish League One side Stenhousemuir was set-up, again played at Forthbank, however, the side could not match its previous performance and went down 3–1 with Ryan Hardie netting the Rangers goal.