The 32 national teams were divided into six groups (four groups of 5 + two groups of 6). The group winners and the two best runners-up played off against each other on a two-legged home-and-away basis to determine the final four, one of whom would host the last four matches.
The team from Serbia and Montenegro, then known as the Federal Republic of Yugoslavia (founded in April 1992) were excluded from the tournament for political reasons. They had been drawn in group five. In the first competition since the dissolution of the Soviet Union, Russia competed. Wales also competed for the first time.
Albeit had been dissolved in 1992, Czechoslovakia still competed for this time.
The allocation of teams into qualifying groups was based on that of 1994 FIFA World Cup qualification with several changes, reflecting the absence of some nations:
Because groups contained different number or teams (six and five), matches against the fifth- and sixth-placed teams in each group are not included in the ranking. As a result, six matches played by each team counted for the purposes of the second-placed table. The top seven advanced to the play-off.