The 1988 World Hockey Challenge would be the second tournament hosted in Europe, taking place in Helsinki, Finland. With their strongest ever PHL contingent, boasting superstars Jari Pukki, Jani Kaaleppi, and Ari Hannula in goal, the hosts hoped to pull off a few upsets at the tournament. Hannula proved to be the Fins’ best player, shutting out the British in game two of the tournament. It would be Finland’s only win in the Round Robin, as the team had lost 7-3 to the Soviets in the opener, then lost in the dying minutes to rival Sweden. The Soviets once again proved to be a powerhouse, with young superstars Sergei Krayev and Alexei Yolkin leading the way while goaltender Alexei Teryoshin seemed unbeatable. The Soviets cruised to a 3-0-0 record with a total of 24 goals scored over three round robin games. 23-year-old Krayev led the tournament in scoring with 7 goals in three games. In Pool A, The Canadians found themselves without their best player when David Appleby announced he would stay home to rest his shoulder, which had been injured during the 1988 PHL playoffs. With Appleby out, Canadian expectations fell on Stuart Burns and Vincent Ducharme. Both players had no problems finding the net in the first two games as Canada defeated West Germany and Czechoslovakia 6-0 and 8-1 respectively. Meanwhile, the Americans entered the tournament with their strongest team ever. Some experts even considered them the favorites to win the tournament. With Captain Craig Bush leading the way, Team USA rolled over Czechoslovakia and West Germany before facing their northern rivals Canada in the round robin finale. The Americans needed a win against Canada in order to take first place in their pool, and their star players would come through. Bush, Jason Crowley, and Gary Clayton each scored while Brian Donovan stood tall as the Americans secured first place.
The Americans continued to roll in the playoff round as they defeated Great Britain 6-2, while Canada survived a close matchup with the host Fins, ultimately winning 5-2 after being tied 2-2 throughout most of the third period. The Soviets also continued to dominate with a 9-0 win over West Germany, while Czechoslovakia came up with the first and only upset of the playoff round with a 5-4 shootout win over Sweden. In the Semifinals, both Alexei Yurlov and Sergei Krayev registered hat-tricks in an 8-3 victory over the Czechs. The Soviets would return to the championship game for the first time since 1980. Meanwhile, the other semifinal game would be a rematch of the 1984 semis, the battle of North America. Team USA jumped to an early 2-0 lead, thanks to a breakaway goal from Jason Crowley, and a hard point shot from Randy Fernandez that was tipped by Craig Davidson. Canada stormed back in the second period, however, with Danny Stevenson scoring on the powerplay before Pete Holloway tied it up. Canada finally went ahead just two minutes into the third when Dave Mack beat two American defenders for the go-ahead goal. With just 40 seconds remaining, Jason Crowley beat Brent MacDonald for the tying goal. The game ultimately went to a shootout. Both MacDonald and Donovan each made several huge saves before Ducharme finally gave Canada the lead. The Americans had one chance to tie it and Craig Bush took the shot. MacDonald very calmly made the stop as Canada went on to face the Soviets in the title game for the third time in tournament history.
The Championship game would be another close one. Canada appeared to have control early after a pair of goals from Stuart Burns and Scott Whitmore. But by the end of the second period, the Soviets managed to erase the lead and build a 3-2 lead of their own on goals from Krayev, Igor Travkin, and veteran Alexander Orlov. Entering the third, Canada needed a big goal, and they would get it from Pete Holloway to tie the game 3-3. Just four minutes later, Ducharme scored to give the Canadians a 4-3 lead before scoring again to make it 5-3. The Soviets were quick to bounce back, once again bringing the game within one on a goal from Alexei Yolkin. With just over a minute to go, the Soviets made one final push for the tying goal, but they could not solve Brent MacDonald. As the clock wound down, Burns scored his second of the game to secure the 6-4 win and a third straight World title for Team Canada. For the second year in a row, one of the losing players was named tournament MVP as Sergei Krayev took home the honors. Krayev scored an unbelievable 13 goals in six games, with at least two in each one. PHL scouts drooled at the thought of the dynamic center playing in the PHL. “That kid is scary good” said one scout. “If we could ever get him over to North America there’s no telling what he would be capable of.”