Fulham lost £33.6m ($53.59m/EUR48.57m) for the year up to the end of June 2002, despite an improvement in turnover and operating costs, and is beaten only by Leeds United's £33.8m ($53.91m/EUR48.86m) loss reported last October.
Despite winning promotion to the Premier League in 2001 - the figures include the club's first full season in the top league - the club has built on a £24m ($38.25m/EUR34.68m) loss the previous year.
The club blames transfer costs and a reduction in the first team's value for the losses.
Said club chairman, Mohamed Al Fayed: "Moderate success on the field came at an exorbitant cost.
"In the long term it is clear that we must take stringent measures if we are to build a club that will last another 100 years and be strong enough to challenge for honours.
"The days of profligate spending are over.
"We must tighten our belts and introduce prudent budgetary control from the top to the bottom - transfer fees, player salaries and stadium development will all be scrutinised."
The club, which is now reviewing options over a new home after scrapping ambitious plans to rebuild its historic Craven Cottage venue, recently fired manager Jean Tigana and still have an outside chance of being relegated as the Premier League season reaches its finale.
English Premier League soccer club Fulham has reported record losses - and the second largest loss ever for a team in England's top division.
