Due to the team’s low attendance and poor financial picture in Long Island, Boe decided to move the franchise back to New Jersey prior to the 1977 – 1978 season. The Knicks once again became an obstacle and threatened to block the move because it would infringe on their exclusive territorial rights to New Jersey. The Nets responded by suing the Knicks on the basis that their actions violated anti-trust laws. The lawsuit was settled between the teams after the league and the state of New Jersey intervened, and the Nets agreed to pay another $4 million to the Knicks for the rights to move.

With the move official, the team was renamed the New Jersey Nets after its new home state. While the team awaited the completion of a new arena at the Meadowlands Sports Complex in East Rutherford, they played four seasons at the Rutgers Athletic Center at Rutgers University in Piscataway. The 1978 – 1979 season saw the team, aided by the strong play of Bernard King, qualify for its first NBA playoff appearance. They fell to Philadelphia 2–0 in the first round, with the loss setting the stage for a period of rebuilding in the coming decade.

On the night of the 2001 Draft, the Nets traded the rights to their first-round selection (Eddie Griffin) to the Houston Rockets for Richard Jefferson, Jason Collins and Brandon Armstrong, and selected Brian Scalabrine in the second round. The trade was widely considered a smart move by the Nets as they needed to get younger and clear out much of the dead weight that was on the bench, as the Nets had the lowest scoring and oldest bench in the league the previous season.

One day after the draft, on June 28, 2001, Thorn traded all-star Stephon Marbury and role player Johnny Newman to the Phoenix Suns for all-star/All-NBA point Jason Kidd and Chris Dudley (whom the Nets later released). The move gave the team something it had been lacking for practically its entire NBA existence, a floor leader who made his teammates better.

In 2004, after failing to secure a deal for a new arena in Newark, New Jersey (eventually a new arena, the Prudential Center, was built in Newark for the New Jersey Devils), the YankeeNets sold the franchise to a group headed by real estate developer Bruce Ratner for $300 million, beating out a group led by Charles Kushner and Jon Corzine. While Kushner and Corzine wanted to keep the Nets in New Jersey, Ratner planned to move the team back to New York. In 2005, the Nets announced plans to locate the team in the Prospect Heights neighborhood of Brooklyn. One of the members of the ownership group at the time was rapper and Brooklyn native Jay-Z, who owned less than 0.07% but has been an outspoken face of the ownership team.