Although Louisville started the 2007 season as #10 in the AP Poll and returned the majority of the 2007 Orange Bowl champion team, including Heisman Trophy candidate Brian Brohm at quarterback, the Cards finished the season a disappointing 6–6, including a loss to Syracuse in which the Cardinals were 37 point favorites
. Nine consecutive winnings seasons and bowl games came to an end under the direction of Kragthrope in year one of his coaching tenure at Louisville with a team that had enough talent to see five of its players taken in the NFL Draft.
Rumors swirled on whether Kragthorpe would return for a second season. After days of speculation whether Kragthorpe could leave for the vacant head coaching job at Southern Methodist University, Louisville sports information director Rocco Gasparro confirmed on November 21, that there is a "50-50 chance" Kragthorpe will be at SMU in 2008. In a press conference that same day Kragthorpe ruled out any speculations that he was entertaining an offer from SMU, saying he was “100 percent committed” to Louisville. Following Louisville's dismal 2007 season
, Kragthorpe released both offensive coordinator Charlie Stubbs and defensive coordinator Mike Cassity and then hired Michigan defensive coordinator Ron English to guide the Cardinals defense and handed the offensive coordinator duties to Jeff Brohm, who was expected to install an offense similar to that run by former Louisville head coach Bobby Petrino.
Kragthorpe opened his second season at Louisville with very low expectations. A year removed from being a preseason top 10 program, the Cardinals entered the 2008 season picked 7th in the 8 team Big East Conference by members of the media
. Louisville hosted in-state rival Kentucky on Sunday, August 31, falling to the Wildcats 27-2 in Louisville's first opening day loss since 2002. On October 25, 2008, Louisville defeated a ranked South Florida team 24-20. Kragthorpe also lost to Syracuse in back to back seasons, giving Syracuse head coach Greg Robinson two of his three Big East wins as a head coach. Following the Syracuse loss, Kragthorpe's Cardinals lost the next four games capped off by a 63-14 loss to Rutgers (Louisville's worst defeat since 1987.) This marked the team's first losing season since 1997.
Louisville fired Kragthorpe on November 28, 2009.