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1During the 1996 off-season, Jerry West pulled off one of the great signings in the history of the NBA when he landed free agent Shaquille O'Neal.

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Additionally, he traded Vlade Divac for 18-year-old draft pick Kobe Bryant. During the season, the Lakers also traded Cedric Ceballos to the Phoenix Suns for Robert Horry. Injury limited O'Neal to 51 games, however the Lakers went on to win 56 games and defeat the Portland Trail Blazers three games to one in the first round of the playoffs. But despite Horry's NBA-record 7-for-7 three-point shooting, the Lakers lost to Karl Malone and John Stockton, at the height of their careers with the Utah Jazz. The Jazz would ultimately lose to Michael Jordan and the Chicago Bulls in the 1997 NBA Finals.

The next year, the Lakers were the only team without a player over the age of 30, and their youth and energy showed, helped by the addition of Rick Fox from the Boston Celtics. They finished with a 61-21 record, losing the division championship only on a tiebreaker to Gary Payton and the Seattle SuperSonics. O'Neal was dominant, finishing only second to Michael Jordan in scoring, and leading the league in field-goal percentage (.584). The Lakers defeated the Portland Trail Blazers three games to one in the first round of the playoffs. In the semi-finals, the Lakers had a meeting with the Seattle SuperSonics, which the Lakers were ready for. They managed to avenge their divisional tiebreaker with the SuperSonics by defeating them four games to one. But once the Lakers reached the Western Conference Finals, they were once more flattened by Utah, who would again lose to Chicago in the Finals.

The 1998–1999 season was shortened due to a lockout, but the shorter season didn't mean there would be any less drama for the Lakers. Nick Van Exel was traded to the Denver Nuggets, Del Harris was replaced by Kurt Rambis, prolific scorer Glen Rice was picked up in a trade for Eddie Jones and Elden Campbell, and the flamboyant Dennis Rodman joined the team, though he was cut after just 23 games. The Lakers played poorly at times and finished the 50 game long season with a 31-19 record. They defeated the Houston Rockets 3-1 in the first round of the playoffs, but were swept in the second round by the eventual champion San Antonio, closing the series by losing the last two NBA games ever played at the Great Western Forum (as The Forum was known at that time).

The 1999–2000 season brought upon four huge changes: a new home floor at Staples Center (which they share with the city rival Los Angeles Clippers), newer, more modern jerseys replacing the ones worn by the lakers since the late 70's, a new coach in Phil Jackson, and a new system: the triangle offense. The new philosophy proved to be potent, as the Lakers started off strong, winning 31 of their first 36 games. They also were able to string together winning streaks of 16, 19, and 11 games, becoming only the third team in NBA history to have three double-digit streaks in one season.

Despite topping the league with a 67–15 record in the regular season, the Lakers found themselves struggling in the playoffs, needing all five games to knock off the Sacramento Kings and coming back from 15 points down in the fourth quarter of Game 7 of the Western Conference Finals against Portland. The Indiana Pacers, coached by the Lakers' old nemesis, Larry Bird, proved to be slightly less of a problem, however, and in six games, the Lakers claimed their first NBA championship since 1988. Shaquille O'Neal picked up both MVP and Finals MVP awards in 2000. Having also shared the 2000 All-Star Game MVP award, he was only the third player in NBA history to win all three awards in the same season. Kobe Bryant was named to the NBA All-Defensive Team, the youngest player to earn the honor. Bryant had blossomed under Coach Jackson, as had Lakers role players such as Derek Fisher, Rick Fox and Robert Horry.