McInally began his career with Celtic in 1982 as a full back; while there he won youth caps and spent a period on loan with Dundee. Jim was transferred to Nottingham Forest in 1984 and joined Coventry City for £80,000 18 months later. McInally then joined Dundee United from Coventry in the summer of 1986 in a joint transfer with Dave Bowman after just five games for the Sky Blues and it was here where the pair of them both excelled and played the best football of what would become a glittering career.
At Tannadice, he quickly became an effective defensive midfielder and played an important part in Dundee United's run to the UEFA Cup Final in his first season. This brought him international recognition and he won the first of ten Scotland caps the next year. An outstanding and consistent performer over the following seven seasons, in 1994, in his fourth final with the club, he won a Scottish Cup winner's medal, playing as a left wing-back, a position in which he often appeared later in his career.
In 1995, following United's relegation to the Scottish Football League First Division, McInally remained in the Premier Division by joining newly promoted Raith Rovers as player/coach. In early 1996, McInally was due to join Aberdeen in a swap deal for former RoverPeter Hetherston, and was paraded at a Pittodrie news conference. Hetherston failed a medical, however, and the move failed to proceed. A few weeks into the following season, McInally moved back to Tannadice and made sixteen appearances before moving back to Dundee as a player-coach at Dens Park.
McInally joined Sligo Rovers as manager at the start of the 1999-2000 season but early results did not go his way and he left the club for personal reasons. He returned to Scotland and joined the coaching staff of Celtic, working with the club's youth teams.
McInally moved back into management as he was appointed manager of Scottish Second Division side Greenock Morton. In the 2005-06 season, he led Morton to 2nd place in the Division after which they were subsequently denied promotion by losing to Peterhead in the play-offs. McInally stated his intention to win the Second Division in the 2006-07 season, with that objective met in mid April when nearest challengers Stirling Albion fell out of mathematical contention. He won the August 2006 Second Division Manager of the Month award, along the way. He resigned in February 2008 after a run of poor results allowed Morton to slip into ninth place in the First Division.