The 1996–97 Courage League National Division Three was the tenth full season of rugby union within the third tier of the English league system, currently known as National League 1. Exeter won a title for the second season in succession, following last seasons National League 4 title. The runner-up, Fylde, finished one point behind Exeter and were also promoted. Four teams were relegated; Walsall to National 2 North and Havant, Redruth and Clifton to National 2 South.