The night after the 1995 Survivor Series, Shawn Michaels fell unconscious during a match with Owen Hart on a live episode of Monday Night Raw. Months earlier, it was reported that Shawn had been attacked by several thugs and the fall was attributed to post-concussion syndrome. In a press conference, Shawn announced that he would compete in the Royal Rumble, which he won by last eliminating Diesel.
In October 1995, WWF Champion Diesel defended the title against British Bulldog where the winner would face Bret Hart at Survivor Series. Diesel was disqualified, then lost the title to Bret the following month. Because the October 1995 stipulation was that the winner would face Bret Hart, and Bulldog technically won the match, he was named the first challenger for December 1995. Bret Hart beat Bulldog, then retained against Undertaker and Diesel in subsequent months, all of which were hyped below the storyline of Shawn Michaels achieving his Boyhood Dream.
At the 1996 Royal Rumble, Diesel cost Undertaker the WWF Championship during his title match. The following month, Undertaker returned the "favor" by keeping Diesel from exiting the steel cage and dragging him down below the ring with him. As a result, the two big men were paired off against each other for WrestleMania XII. In a match to build for the big event, Shawn & Diesel faced Bret Hart & Undertaker in Madison Square Garden but Diesel snapped and swatted all three men with a steel chair, including Shawn Michaels.
The night after the 1996 Royal Rumble, Vader hospitalized then-WWF President Gorilla Monsoon with a Vader Bomb. As a result, Roddy Piper was named the interim WWF President. After making the title match between Bret and Shawn an Iron Man match, Piper was involved in altercations with goldust. Razor Ramon had been scheduled to challenge goldust at WrestleMania XII, but he was suspended for "unsportsmanlike conduct," so Piper was named as the replacement for a non-title Hollywood Backlot Brawl against goldust. Piper also wrestled a series of non-televised matches with the 1-2-3 Kid during Razor's suspension.
After an unmemorable stint under the moniker "The Ringmaster," Steve Austin convinced the WWF to change his name. It was known that the focus would be on his cold-heart, but it wasn't until his British wife told him to drink his hot tea "before it goes stone cold" that his legendary ring name was born.
The Ultimate Warrior had not appeared for any wrestling program since November 1992. He made his long-awaited return at WrestleMania XII, pinning HHH in a matter of seconds.
WWF Tag Team champions Smoking Gunns were forced to vacate the titles after one of them was injured. A tournament was set up to establish the next champions, and the finals were scheduled for WrestleMania XII. The Godwinns (with Hillbilly Jim) and the Body Donnas (with Sunny) were the two teams.
On January 1, 1996, the WWF began airing a series of vignettes called "Billionaire Ted's Rasslin' Warroom" which were intended to poke fun at WCW Monday Nitro. The series of vignettes culminated in a match between The Huckster and The Nacho Man, obvious spoofs of Hogan and Savage, respectively. The match was hyped to air during the WrestleMania XII pre-show.
The final match in the WWF Tag Team title tournament was held during the pre-show, in which the Body Donnas beat the Godwinns to win the vacant titles. Also in the pre-show, the match between Huckster & Nacho Man was ruled a draw when both middle-aged competitors fell asleep during the contest.
After celebrities and other non-wrestling personalities cluttered the previous year's event, there were no celebrities or special appearances at WrestleMania XII, not even a celebrity-rendition of "America The Beautiful."
Prior to their match, HHH pitched several ideas for a memorable match with The Ultimate Warrior, but Warrior dismissed the suggestions by telling Hunter that because the match was about him (Warrior), they were going to do the match his way, which was less than two minutes in duration.
Although it had not been disclosed on WWF programming, it was publicly known that Diesel was going to World Championship Wrestling once his contract expired in June 1996. As such, the WWF seated Diesel at a table with Billionnaire Ted for the televised WWF Slammy Awards, despite Nash's protests.
Bret Hit Man Hart did not appear on WWF television after WrestleMania XII until October 1996, although he did participate in the WWF overseas tour, wrestling Stone Cold Steve Austin in a series of matches.
Friction between Shawn Michaels and Bret Hart continued with high expectations of a rematch; however, no agreements could be reached; plus HBK was injured for WrestleMania 13 and did not wrestle. Tensions between the two continued to escalate until the Montreal Screwjob.
The much-anticipated return of The Ultimate Warrior lasted less than four months, although he did challenge WWE Intercontinental champion Goldust at the following month's In Your House. WWF included him in a main event schmoz at King of the Ring, but he left before he could be used in the fall-out. Lucky for the WWF, Sid was available to fill the void he left.
The "Rasslin' Warroom" skits did nothing to help the WWF in its Monday Night Wars (they did not even offend anyone at WCW either) and WCW Mondy Nitro started to dominate in the ratings from May 1996 until April 1998.