After an undisclosed financial settlement was agreed Mills left Alfreton to return to Tamworth, who at this time were in the Conference National, for a second spell as manager on 26 January 2007. He joined with the team 24th in the table and following his appointment he said: "It feels fantastic to be back. It is an amazing football club that means a lot to me". He was in charge for the home match against Crawley Town the day after his appointment, the visitors winning 1–0 with a 54th-minute goal scored by Mark Wright . Mills was unable to keep Tamworth up, the club being relegated to the Conference North with a 22nd-place finish in the Conference National. He stated his determination to get the club back up, saying: "The disappointment will go away because this is a great football club to be at. We all need to stay proud and positive and I will now prepare a squad for the start of next season." Tamworth spent most of 2007–08 in midtable, eventually finishing 15th in the Conference North; the "Tamworth Herald" claimed it was "among the poorest campaigns in the club's history".