The football tournament began with the first matches in the group stage on 8 July 2001 and ended with the gold medal match on 13 July 2001. The Faroe Islands and Åland contested the final. The Faroe Islands would win the final 5–4 with added overtime, winning the inaugural tournament and their first win in the competition. In the bronze medal match, Jersey defeated Isle of Man 2–3.
A five-a-side youth football tournament was held at the inaugural games in 1985 held in Douglas, Isle of Man but football was completely absent from the programme at the 1987 Island Games held in Guernsey. This edition of the Island Games would have its first women's tournament in football.[1]
Seven teams took part in the competition. They were drawn into two round-robin groups, one group with four teams and one group of three teams. The top two best placed teams from each group and would qualify for the semifinals. The highest non-qualifier would automatically become the fifth-placer, while the two lowest ranked teams in the group stages would face each other in the sixth-place match. The winning team from each semifinal would contest the gold medal match and the losing team from each would contest the bronze medal match.[2]
Åland and Jersey would advance to the semifinals as they were the top two highest ranked teams in Group 1, with the former winning three matches and the latter winning two and losing one.[2]
The Faroe Islands and the Isle of Man would advance to the semifinals as they were the top two highest ranked teams in Group 1, with the former winning two matches and the latter winning one and losing one.[2]