After his Reading days, Dixon signed with Chelsea in August 1983 by manager John Neal. Chelsea chairman Ken Bates initially hesitated when faced with the £150,000 transfer fee plus an additional £25,000 if Dixon ever played for the England national side, but relented and the deal went ahead. Dixon arrived as part of Neal's radical re-building of the side, who had narrowly avoided relegation to the Third Division three months earlier, and was joined in the same summer by Pat Nevin, Nigel Spackman, Joe McLaughlin and Eddie Niedzwiecki.
