Venables became manager of Australia in November 1996, following the resignation of Eddie Thomson. In the 1997 Confederations Cup, Venables led Australia to the final before defeat to Brazil. His side swept through the Oceania World Cup qualifiers, but were beaten in a play-off by Iran on away goals. With the team having drawn 1–1 in Tehran, Australia led the second leg 2–0 early in the second half, but they conceded two late goals to miss out on qualification for the 1998 World Cup on away goals. Venables decided to quit the Socceroos as the National Governing Body had bank-rolled the Federation in the hope of reaching their first World Cup since 1974.