Forsyth started his career at Motherwell before being signed by Rangers in October 1972. He went on to play 326 times for Rangers, most famously when he scored the winning goal in the 1973 Scottish Cup Final against Old Firm rivals Celtic from six inches. Forsyth's cup winning goal is still referred to when players score goals from close range in Scottish football.
After his playing retirement, Forsyth was appointed manager of Dunfermline Athletic in 1982, although he relinquished the position within a year. He then accepted a position as assistant-manager to former Ibrox team-mate Tommy McLean at Greenock Morton in 1983. The combination proved successful and Forsyth was appointed McLean's assistant at Motherwell then Heart of Midlothian when McLean moved to these clubs in 1984 and 1994 respectively.