In January 2007, Schilling announced on the Dennis and Callahan show that after talking with his family, he had changed his mind and did not want to retire at the conclusion of the 2007 season. He sought to negotiate an extension to his current contract, but Red Sox executives announced that they would not negotiate with him until after the season citing Schilling's age and physical condition as factors in their decision. Schilling went on to say he would become a free agent at the end of the season, for the first time in his career, and would not negotiate with the Red Sox during the 15 days after the end of the World Series when the team has exclusive negotiating rights with potential free agents. On a June appearance on the Dennis and Callahan Show, Schilling stated he would accept a one-year extension to his contract at his current salary if the Red Sox offered it to him. Questioned on his statement, Schilling said, "I said I wouldn't negotiate a deal during the season, and I'm saying that now. But I would accept that offer."
On June 7, 2007, Schilling came within one out of his first career no-hitter. Schilling gave up a two-out single to Oakland's Shannon Stewart, who lined a 95-mph fastball to right field for the A's only hit. Schilling followed up his one-hitter with two poor starts and was sent back to Boston on June 20 for an MRI on his shoulder and was placed on the disabled list. He returned from the disabled list on August 6, pitching at least six innings in each of his nine starts following the All-Star break.
Schilling continued his career postseason success in 2007, throwing seven shutout innings in a 9–1 victory over the Angels in the ALDS, wrapping up a three-game sweep for Boston. However, he did not fare as well pitching in Game 2 of the ALCS against Cleveland, surrendering nine hits—two of them home runs—and five earned runs in just 4⁄3 innings. He did start again in the sixth game of the series, pitching seven complete innings during which he recorded five strikeouts, surrendering no walks with only two earned runs to gain the victory and force a Game 7. He earned his third win of the 2007 playoffs in Game 2 of the 2007 World Series leaving after 5⁄3 innings, striking out four while allowing only four hits. With this win, he became only the second pitcher over the age of 40 to start and win a World Series game (Kenny Rogers became the first just one year prior). As Schilling departed in the 6th inning, fans at Fenway Park gave Schilling a standing ovation.
Schilling filed for free agency on October 30, 2007. He said he would seek a one-year deal, and according to ESPN First Take and his own blog page 38 Pitches. Schilling later signed a one-year deal with the Boston Red Sox for the 2008 season. Schilling missed all of the 2008 season because of a shoulder injury. The injury was first revealed in February 2008 and the treatment options became a point of contention between Schilling and the Red Sox management. On March 13, 2008, the Red Sox placed Schilling on the 60-day disabled list as he continued to rehabilitate his right shoulder. On June 18, 2008, Curt Schilling left the team to be reevaluated after suffering pain when throwing off the mound. On June 20, 2008 Schilling stated on WEEI's Dennis and Callahan show that he would undergo season-ending surgery and that he had possibly thrown the last pitch of his career. On June 23, 2008, Schilling underwent biceps surgery, during which a small undersurface tear on the rotator cuff was discovered and stitched, and a separation of the labrum was repaired. According to his surgeon, he could begin throwing in four months.
On January 29, 2007, Schilling announced in an interview that he would support Senator John McCain, who became the Republican nominee in the 2008 presidential election. In the same interview, he criticized then-presidential candidate and Senator Hillary Clinton (D) for her comments criticizing the war in Iraq. Schilling also turned up on the campaign trail several times stumping for McCain.
During a radio show appearance on May 8, 2007, Schilling criticized Barry Bonds, stating: "He admitted to cheating on his wife, cheating on his taxes and cheating on the game." Soon after, Schilling issued an apology on his blog, stating "it was absolutely irresponsible and wrong to say what I did," without, however, indicating his opinion on the statements' veracity.
In 2007, Schilling engaged in another war of words with a writer, this time with Boston Globe sports columnist Dan Shaughnessy. Shaughnessy in his column and during television appearances has criticized Schilling for the condition he showed up in for spring training, referred to him as "the Big Blowhard" and mocked Schilling's blog and radio appearances. Schilling has responded by using the Sons of Sam Horn forum and his own blog to point out errors in Shaughnessy's columns.
On April 27, 2007, broadcaster Gary Thorne said that he overheard Red Sox catcher Doug Mirabelli say that the blood on the sock used by Schilling in Game 6 of the 2004 ALCS was actually paint. Mirabelli accused Thorne of lying and a day later, after talking to Mirabelli, Thorne backed off his statement saying he misinterpreted what was intended as a joke, "Having talked with him today, there's no doubt in my mind that's not what he said, that's not what he meant. He explained that it was in the context of the sarcasm and the jabbing that goes on in the clubhouse."