They had to cut their wage bill from €76 million (Dh359.4m) to €30 million and offloaded big name players like Nilmar, Borja Valero, Carlos Marchena, Giuseppe Rossi and current Real Madrid goalkeeper Diego Lopez, but they were still the league's best payers and signed veteran Swedish international Olaf Mellberg.
They also retained another veteran, captain Marcos Senna.
Villarreal's demotion did not just impact on their first team, but their second team who played in Spain's second tier.
They were automatically demoted when the first team dropped down a level. They started this season well under experienced coach Marcelino Garcia Toral, formerly of Sevilla and Zaragoza.
Villarreal were top by the end of September, yet began to wobble around the turn of the year, losing four in seven games and falling to seventh as Elche ran away with the league.
Two teams go straight up, with the sides finishing third to sixth going into the play-offs.
A play-off looked probable for Villarreal, Uefa Champions League semi-finalists in 2006 and good enough to finish second, 10 points clear of Barcelona in 2008.
Two weeks ago, Catalan side Girona looked strong for a first-ever promotion to the top flight.
Then they lost at home to bottom of the table Xerez, before being defeated 4-1 at Villarreal on Saturday.
That win lifted the Yellow Submarines, undefeated since January 19th, into second with three games to play.
The race for second is still a close one, but the Yellow Submarine is rising again.
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