Everton captain Phil Neville claims there is renewed belief at Goodison Park following the arrival of new signings during January.
"The signings made have given the club a whole new feeling," Neville told BBC Radio Merseyside.
"The whole place is alive now because of them."
Having also signed Darron Gibson from Manchester United and Landon Donovan on loan from LA Galaxy, Everton are unbeaten in their last six games in all competitions and have beaten Manchester City and Chelsea in their last two Premier League matches at Goodison Park.
David Moyes' team are now up to 10th in the league, and Neville says the squad is showing they can compete with the top sides again.
"We now feel we have a challenge, a challenge within, as players need to get into the team," said the former Manchester United defender. "That ups the quality in training sessions.
"It means we can challenge teams when they come [to Goodison] as well.
"I think [at the beginning of the season] we lost the belief that we could really compete, and it's the belief we've always had ever since I came to the club.
"I think we're getting that back now."
Moyes' squad options have also been boosted by Tuesday's signing of 20-year-old former Benfica academy graduate Francisco Junior on a free transfer.
The midfielder, who has been capped twice by Portugal Under-21s and spent some time in Manchester City's development squad earlier this season, has signed a four-and-a-half year deal, subject to receiving international clearance.
Last season, Everton finished seventh in the Premier League after being mid-table in February.