Almost 25 years after the Jazz left for Utah the NBA returned to New Orleans as the Hornets dissatisfied with Charlotte moved to the Crescent City. Ironically when the Hornets played their first game in New Orleans on October 30th their opponents were the Utah Jazz. With Baron Davis scoring 21 points with 10 rebounds it would be a successful debut for the Hornets who won 100-75. The Hornets took a quick liking to their new surrounding as they won their first ten games at home on the way to a 16-7 start.

When the New Orleans Hornets arrived in 2002, they persuaded the state government to demand that the Brass foot the cost of converting the arena between basketball and hockey configurations. That expense was more than the Brass were willing to pay, and they were forced to fold due to the lack of another suitable arena.

The Hornets played their first game at the Smoothie King Center versus the Utah Jazz on October 30, 2002.

The arena was completed in 1999 at a cost of $114 million and officially opened on October 19, 1999. The arena seats 16,867 for Pelicans games. It has 2,800 club seats and 56 luxury suites.

Paul was selected fourth overall in the 2005 NBA draft by the New Orleans Hornets. Due to the devastation caused by Hurricane Katrina, the Hornets played most of their games in Oklahoma City that year. Paul finished the season leading all rookies in points, assists, steals, and double-doubles, and became only the second rookie in NBA history to lead the league in total steals. With final averages of 16.1 points, 5.1 rebounds, 7.8 assists, and 2.2 steals per game, he was named Rookie of the Year, falling just one vote shy of winning the award unanimously. The only other rookie to receive a first place vote was Deron Williams, with whom Paul enjoyed a brief rivalry early in their careers.

At the 2007 All-Star Weekend, Paul set new Rookie Challenge records with 17 assists and 9 steals. For his sophomore season, he increased his scoring and passing averages to 17.3 points and 8.9 assists per game, but played in only 64 games due to injury.

Because of the catastrophic devastation brought by Hurricane Katrina upon the communities of southeastern Louisiana, the Hornets franchise temporarily relocated its base of operations to Oklahoma City, Oklahoma, in 2005 – 2006 and 2006 – 2007, posting records of 38–44 and 39–43 respectively. During this time, the franchise was known as the New Orleans/Oklahoma City Hornets. In these two seasons, most home games were played at the Ford Center in Oklahoma City, while a few remained at New Orleans Arena. One year after the Hornets moved back to New Orleans permanently, the Seattle SuperSonics relocated to Oklahoma City and became the Thunder.

With the future of the teams secure, and a young star to build around, a new era was set to begin in New Orleans. New Owner Tom Benson felt the name Hornets did not fit the city of New Orleans and began exploring a new nickname that would draw more fans and give it a Louisiana style. Though he preferred to buy the name Jazz back from Utah, a deal was not to be made and it was announced following the season the team would become the New Orleans Pelicans.