Gray moved to Everton in November 1983 for £250,000. He spent two seasons with the Merseyside club, winning the FA Cup in May 1984. Gray scored in the final against Watford in controversial fashion by heading the ball out of the Watford's goalkeeper's hands. A year later, he won the League Championship and European Cup Winners' Cup, also scoring in the final of the latter. He also reached another FA Cup final, but this time he was on the losing side as Everton were defeated by Manchester United. Then came the arrival of England striker Gary Lineker from Leicester City in the 1985 close season. Despite angry petitions from Everton fans wanting to keep Gray at Goodison Park, he left the club on 10 July 1985, returning to Aston Villa in a £150,000 deal.