During the 2008–09 season, he guided Hertha to an excellent fourth-place position, having at his disposal just the 13th-largest budget of the 2008–09 Bundesliga. Hertha played in the UEFA Cup and were eliminated in the group stage. In February 2009, one of the highlights of his spell in Germany was the brilliant tactical display of Hertha against Bayern Munich in a full Olympiastadion (almost 75,000 spectators). This performance allowed them to beat the erstwhile reigning German champions 2–1 to take Hertha temporarily top of the Bundesliga. Favre extended his contract for an additional year.