Madonna appears in the cold opening to read a "statement" from NBC about the previous season: "It was all a dream. A horrible, horrible dream." (This was a reference to the May 1986 season finale of Dallas (1978), which revealed that show's full 1985-1986 season to have been a dream.) The show was nearly canceled due to poor ratings in the previous season, but Lorne Michaels convinced NBC that he could improve the show by revamping the cast.
Phil Hartman had auditioned for the previous season but was not hired until this year. Hartman joined fellow rookie Jan Hooks and one-season veteran Jon Lovitz, with whom he'd worked in the cast of the Groundlings comedy troupe, in some ways Los Angeles's answer to Chicago's Second City. This marked the first appearance of Groundlings members on SNL since Laraine Newman of the original cast, and signaled that the troupe would soon have a much greater presence on SNL.