Dooley, born to a German mother and a U.S. Army father, started his professional career in 1984 with third division club FC Homburg. Prior to that, he had played as a forward with amateur team FK Pirmasens. He moved to midfield with Homburg and helped the team move steadily up the German leagues, until they finally reached the Bundesliga. He moved to Kaiserslautern in 1988 and helped them to the German Cup in 1990 and the Bundesliga title in 1991. After the 1994 World Cup, he moved to Bayer Leverkusen, and to Schalke 04 a year after that, helping them to the 1997 UEFA Cup title. At the end of the season, he made his move to Major League Soccer (MLS), signing with the Columbus Crew. Dooley would spend three seasons in Columbus, and was named to the MLS Best XI in both 1997 and 1998. In 2000, Thomas was traded to the MetroStars for Mike Duhaney, partially to help support Lothar Matthäus' adjustment to the United States. Dooley played one year for the Metros before retiring from soccer altogether. He then went back to Germany, becoming the head coach of FC Saarbrücken in 2002 and 2003.
As U.S. Soccer started to look abroad for players eligible to play for its national team in advance of its hosting the 1994 FIFA World Cup, Dooley was discovered; he assumed US citizenship in 1992, and made his first international appearance on May 30 against Ireland. Dooley became a regular for the US almost immediately, being named U.S. Soccer Athlete of the Year in 1993 and then playing every minute at the 1994 FIFA World Cup. After John Harkes was dismissed from the U.S. national team, Dooley was named captain for the 1998 FIFA World Cup, and started every game for the U.S. On February 21, 1999, Dooley was given a send-off match by the United States in a friendly against Chile. He would end his international career with 81 caps and seven goals. Dooley was also recently called by new men's national team coach Jurgen Klinsmann to be an assistant coach in the match against Mexico on August 10, 2011.