Hughes was appointed manager of Wales in 1999 and remained in the role until 2004. He failed to qualify for a World Cup or European Championship during his five years in charge, although his reign coincided with a marked improvement in results. Wales came particularly close to securing 2004 European Championship qualification. Hughes then spent four years in charge of Blackburn, guiding them to sixth place in 2005–06. He took charge of Manchester City in June 2008 for a year and a half before spending the 2010–11 season at Fulham. He joined Queens Park Rangers in January 2012, helping them retain their Premier League status in 2011–12. Despite some high-profile signings in the summer of 2012, QPR began the 2012–13 season in very poor form, and Hughes was dismissed on 23 November 2012.
Hughes was appointed manager of Stoke City on 30 May 2013. He guided the club to three consecutive ninth-place Premier League finishes in 2013–14, 2014–15 and 2015–16. Progress at Stoke stalled in the 2016–17 season, with the club finishing 13th in the table. Following a poor start to the 2017–18 season, with the club in the relegation zone heading into the new year, he was dismissed by Stoke on 6 January 2018, hours after an FA Cup third round exit to League Two side Coventry City. He was appointed manager of Southampton on 14 March 2018, signing a contract until the end of the season, with Southampton one point above his former club Stoke in 17th place at the time of his appointment. He guided the club to safety at the end of the 2017–18 season, but was dismissed in December 2018 with the club at 18th in the table.