Lofton, who was considered the "most sought-after free agent" following the 1997 season, returned to the AL and Cleveland Indians when he signed a three-year, $24 million contract. Happy to return to Cleveland, Lofton said, "It's like I was a ghost for a year. But now I'm back." Lofton's .282 batting average was to that point the lowest of his MLB career, but his 87 walks were a career high. However, he had 64 RBIs, his second-highest RBI total, which had been 66 at that point in his career and doubled his stolen base count with 54 from the previous year's total of 27. The Indians won the AL Central with an 89–73 record and their match-up against the Boston Red Sox, three games to one, in the 1998 ALDS. In the series against the Red Sox, Lofton's .375 batting average led the Indians, as did his two stolen bases and six hits. The Indians lost the 1998 ALCS in six games to the New York Yankees, who had won 114 games in the regular season. Lofton tied for third-most number of hits and strikeouts and his 27 at-bats led the Indians. For the 1999 season, Lofton finished with a .301 batting average, the seventh time in eight MLB seasons hitting .300 or better. It was, however, the first season with Cleveland he did not record 50 or more stolen bases, finishing the season with 25. The AL Central-winning Indians (97–65) lost in the 1999 ALDS to the Boston Red Sox, three games to two. The Indians had led in the series two games to none before losing three games in a row and the series. Lofton and Roberto Alomar each had two stolen bases in the series, but Lofton recorded just two hits in 16 at-bats. In Game 5, Lofton dislocated his left shoulder and tore his rotator cuff while diving into first base.