The 2023–24 season is Birmingham City Football Club's 121st season in the English football league system and 13th consecutive season in the second-tier EFL Championship. As with all members of the English Football League, the club's first team also competed in the FA Cup, in which they lost to Leicester City in the fourth round, and the EFL Cup, from which they were eliminated in the second round by Cardiff City.

In October, head coach John Eustace was sacked and replaced by Wayne Rooney as manager. Rooney was sacked on 2 January 2024. His successor, Tony Mowbray, stepped back from the role in February to undergo medical treatment, took formal medical leave on 19 March, and Gary Rowett rejoined the club as interim manager. Mowbray resigned on health grounds on 21 May. On 6 June, after "close to 1,000 coaches being evaluated and more than 40 being spoken to directly or through their representatives", Chris Davies, senior assistant coach under Ange Postecoglou at Tottenham Hotspur, was appointed manager on a four-year contract. It would be his first senior managerial role.

Birmingham ended the season with 50 points, which was not enough to save them from relegation to EFL League One. They finished 22nd in the 24-team table, one point behind Plymouth Argyle.

The season covers the period from 1 July 2023 to 30 June 2024.

A June 2022 attempt to purchase the club by a group fronted by former Watford F.C. owner Laurence Bassini, involving financier Keith Harris and with money reportedly loaned by David Sullivan, came to nothing. A consortium led by fashion industry businessman Paul Richardson and Argentine former footballer Maxi López announced in July that they were close to completing the purchase of a stake in the club, and later confirmed that they were providing operating funds, but pulled out in December citing a failure to agree revisions to the original terms of agreement. Richardson, López and their proposed chief executive, former Charlton Athletic chairman Matt Southall, were sanctioned by the EFL after admitting breaching regulations by taking effective control of the club without approval, and the club were deducted two points, suspended until the end of the 2023–24 season.

In April 2023, Birmingham Sports Holdings (BSH) confirmed letters of intent had been signed to sell 24% of Birmingham City plc shares held by themselves and the 21.64% owned by Oriental Rainbow, as well as the whole of Birmingham City Stadium Ltd, to Shelby Companies Ltd, a subsidiary of asset management company Knighthead Capital Management fronted by Tom Wagner, Knighthead's co-founder and co-CEO. EFL approval was forthcoming in early June, and Hong Kong Stock Exchange (HKSE) approval preceded BSH's extraordinary general meeting (EGM) on 13 July that voted overwhelmingly to accept the offer. Although BSH retained 51% of the shares, Wagner confirmed that Shelby were "responsible for the operations of the club moving forward" and that "nothing about the way the transaction is structured will prevent us from obtaining the long-term goals we have for the club." The club's new board of directors included Wagner as chairman, four Shelby appointments, two BSH appointments, and Garry Cook as CEO, and considerable media attention followed the arrival of seven-time Super Bowl-winner Tom Brady as minority owner and chair of the club's advisory board.

Work began during the 2022–23 season to demolish and rebuild the lower tiers of the Kop and Tilton Road stands, which had remained closed since late 2020 because of what was initially described as the effect of water ingress on structural steelwork and eventually revealed to be asbestos-related damage. The works at the Tilton Road end, to include installation of rail seats to permit safe standing in the lower tier, were due to complete in September 2023, and the Kop was expected to fully re-open two months later. Work stopped after main contractors Buckingham Group filed for administration in mid-August, and resumed in mid-September under the management of Mace Consult, with completion expected by the end of November. The Championship fixture against West Bromwich Albion on 6 October was used as a test event, with 834 safe standing places available for use.

Departures included Jobe Bellingham, the 17-year-old brother of England international Jude, who joined Sunderland for an undisclosed fee, and Tahith Chong, for whom Luton Town, newly promoted to the Premier League, paid a fee reported by BBC Sport as £4 million. The release of Harlee Dean, Maxime Colin, George Friend and Kevin Long and the departure of loanees Auston Trusty and Dion Sanderson left the team with only one senior defender, Marc Roberts. Long eventually opted to accept the offer of a new contract, but the first new arrivals were both attacking players: Leeds United and Wales forward Tyler Roberts, who joined for an undisclosed fee, and Japanese international attacking midfielder Koji Miyoshi, who was out of contract at Royal Antwerp. Defensive midfielder Krystian Bielik joined Birmingham for the third time, this time on a three-year permanent contract, and Ethan Laird, a 21-year-old right back, signed from Manchester United, also on a three-year deal. winger Siriki Dembélé arrived from AFC Bournemouth on a three-year deal to replace Chong, Sanderson returned on a four-year contract and was named captain, Werder Bremen's England under-21 left-back Lee Buchanan signed a five-year deal, and after several weeks on trial, former Blackpool forward Keshi Anderson was given a 12-month contract. Later in the window, Fulham forward Jay Stansfield arrived on loan for the season, and there were three more late additions on season-long loans: Austrian defender Emanuel Aiwu from Cremonese, Cody Drameh, a right back from Leeds United, and another Werder Bremen player, Scotland international winger or forward Oliver Burke. Forward Sam Cosgrove was released from his contract to join Barnsley on a free transfer.