Thomas moved to Crystal Palace in June 1987, for a fee of £50,000. Thomas made an immediate impact at Selhurst Park, collecting the Supporters' Player-of-the-Season award in his first season, and helping his side to promotion to the top flight in his second year at the club. His third year at Palace was even better, as Thomas enjoyed top-flight football for the first team, and captained the side in the 1990 FA Cup Final at Wembley Stadium, where they drew 3–3 with Manchester United, before losing in a replay. In the 1990–91 season, he was a crucial member of the Palace squad who finished in third place in the top flight. It was the club's best ever finishing position, and Thomas was rewarded again with the Supporters` Player-of-the-Year trophy.