Alomar was selected as an All-Star in 1991 and 1992. However, his 1992 season was largely lost due to injuries, and he finished the year with zero home runs and only seven RBIs in 199 at-bats. Over the next few years, Alomar suffered several injuries and failed to realize his potential. He came back strong in the first half of 1996 to make his fourth All-Star team, but then faded in the second half.
In 1997, everything finally came together for Alomar. He batted .324, was the MVP of the All-Star game in his home ballpark (hitting a game-deciding two-run home run off Shawn Estes to the left field bleachers in the bottom of the seventh inning of a 3–1 American League win; he was the first player to hit an All-Star game home run in his home stadium since Hank Aaron in 1972), put together a 30-game hitting streak (one short of Nap Lajoie's Indians record and four short of his former teammate Benito Santiago's record for catchers), and helped lead Cleveland to their third straight postseason appearance. In the Division Series against the New York Yankees, Alomar hit .316 with two home runs, including a game-tying shot off Mariano Rivera in the eighth inning of Game 4. Though he was less effective against the Baltimore Orioles in the ALCS, he still provided a game-winning hit in the ninth inning of Game 4. The Indians lost the World Series to the Florida Marlins, but not on account of Alomar who hit .367 with two home runs.
During the end of the 2011 season, Alomar was rumored to be on the shortlist of candidates for the vacant Chicago Cubs and Boston Red Sox managerial positions. On September 28, 2011, Alomar was promoted by the Indians to the position of bench coach for the 2012 season. On September 27th, 2012, the Indians promoted him to interim manager after firing Acta. On October 6, 2012 the Indians announced that the club had hired Terry Francona to take over as manager.