Hufnagel was named an All-American at Penn State University in 1972, where he was the starting quarterback for three seasons (1970–1972), earning a 26–3 record. As a junior, he was instrumental in the Nittany Lions' 30–6 Cotton Bowl Classic victory over the University of Texas and played in a 14–0 loss to the University of Oklahoma in the 1973 Sugar Bowl as a senior. In 1972, Hufnagel became the first Nittany Lion quarterback to pass for more than 2,000 yards in a season. His 2,039 passing yards set Penn State’s single-season record for passing yards (since broken) and he remains among the top 10 in most major career passing categories. He finished sixth in the Heisman Trophy voting that year.
Hufnagel became the offensive coordinator of the New York Giants in 2004, and molded them into one of the NFL’s most potent offenses. Tiki Barber set a franchise rushing record two years in a row, and the Giants became only the fifth team in NFL history to have five different players score at least seven touchdowns. (Tiki Barber, Jeremy Shockey, Plaxico Burress, Amani Toomer and Brandon Jacobs). While Hufnagel is credited with the rapid development of quarterback Eli Manning, he is sometimes criticized for his often predictable play-calling and an inability to utilize his offensive play-makers effectively.
During the 2006 season, Hufnagel came under much criticism for being too pass-happy and abandoning the running game after the Giants trailed during games. In addition, he was also questioned for having Manning throw the ball the third and sixth most passes in the league over 2005 and 2006 despite Tiki Barber clearly being the best player on offense. In addition, his situational play-calling came under scrutiny, such as when running back Brandon Jacobs was removed from the game inside the five yard-line in two games, thus making the offense more predictable to opposing defenses.
Following a 30–7 defeat by the New Orleans Saints, Hufnagel was stripped of his duties as offensive coordinator. A week later, it was revealed he was fired.
On December 3, 2007, Hufnagel was hired as the head coach and general manager of the Calgary Stampeders. He led the Stampeders to the Grey Cup title with a 22–14 victory over the Montreal Alouettes on November 23, 2008. For his performance in the 2008 CFL season, he was awarded the Annis Stukus Trophy as the CFL's coach of the year. Hufnagel got the Stamps back to the Grey Cup game to conclude the 2012 CFL season. The Stampeders lost the 100th Grey Cup game to the Toronto Argonauts 35-22.
Hufnagel earned a Bachelor of Science in marketing from Penn State University in 1973. He and his wife, Penny, have two daughters and a son and live in Calgary and Jacksonville. He attended Montour High School in McKees Rocks, Pennsylvania.