After a two-year hiatus from coaching, Sutter returned to the NHL in 1997–98 season as head coach of the San Jose Sharks under general manager Dean Lombardi. The Sharks in the previous season finished with a dismal 27–47–8 record good enough for second last in the NHL. In his first season behind the bench Sutter led the Sharks to a 34–38–10 record and the first playoff appearance for the franchise, losing in the first round to the Dallas Stars four games to two.