On August 9, 1988, in a move that drastically changed the dynamics of the NHL, the Oilers traded Gretzky, along with Marty McSorley and Mike Krushelnyski, to the Los Angeles Kings for Jimmy Carson, Martin Gelinas, $15 million in cash, and the Kings' first-round draft picks in 1989 (Jason Miller), 1991 (Martin Rucinsky), and 1993 (Nick Stajduhar). "The Trade", as it came to be known, upset Canadians to the extent that New Democratic Party House Leader Nelson Riis demanded that the government block it and Pocklington was burned in effigy. Gretzky himself was considered a "traitor" by some Canadians for turning his back on his adopted hometown, his home province, and his home country; his motivation was widely rumoured to be the furtherance of his wife's acting career. Others believe it was Pocklington who instigated the trade, seeking to benefit personally from the transaction.
On October 6, 1988, Wayne Gretzky made his debut as a member of the Los Angeles Kings in a game against the Detroit Red Wings. Gretzky scored on his first shot, and contributed 3 assists in an 8-2 victory. In Gretzky's first season with the Kings, he led the team in scoring with 168 points on 54 goals and 114 assists, and won his ninth Hart Memorial Trophy as the league's Most Valuable Player. He led the Kings to a second-place finish in the Smythe Division with a 42–31–7 record (91 points), and they ranked fourth in the NHL overall.
Gretzky's first season in Los Angeles saw a marked increase in attendance and fan interest in a city not previously known for following hockey. The Kings, who then played their home games at the Great Western Forum, named Gretzky their captain (a position he held until his trade to St. Louis in 1996) and boasted numerous sellouts on their way to reaching the 1989 playoffs.
Paced by Gretzky, Los Angeles led the league in goal scoring, with a total of 376 goals scored. In the playoffs, the Kings upset the Oilers, Gretzky's former team, in seven games in the Smythe Division Semi-finals before being swept in the Smythe Division Finals by the eventual Stanley Cup champion Calgary Flames in four straight games.
This was also the first season that the Kings wore their silver and black uniforms, which they would wear until the 1998–99 season. In the off-season, they had changed their team colours to silver and black from gold and purple, which were more associated with their co-tenants at the Great Western Forum, the NBA's Los Angeles Lakers. They had also unveiled a new logo that reflected the new team colours.
The Kings faced Gretzky's old team, the Oilers, in the first round of the 1989 playoffs. They fell behind 3 games to 1, but rallied to take the series in seven games, helped in no small part by nine goals from Chris Kontos, a little-known player who had just recently been called up from the minor leagues. However, the Kings were quickly swept out of the playoffs in the second round by the eventual Stanley Cup champion Calgary Flames.