Kelly returned to the First Division after securing a £350,000 move to Tranmere Rovers in August 1997. John Aldridge's "Superwhites" managed to secure mid-table finishes in his three seasons at Prenton Park, as he scored 14 goals from 37 games in 1997–98, six goals from 29 matches in 1998–99, and 15 goals from 46 appearances in 1999–2000. He was appointed as club captain soon after joining. He featured prominently in the club's run to the 2000 League Cup Final, and scored the consolation goal in a 2–1 loss to former club Leicester City at Wembley Stadium. He was released by Tranmere in July 2000 after failing to agree a new one-year contract.