He was appointed to coach the Uruguay national team in the 1999 Copa América, earning second place honors. In 2001 he was chosen to replace Daniel Passarella, qualifying for the 2002 FIFA World Cup after finishing 5th in the South American zone and winning a playoff against Australia. Uruguay was drawn into group A alongside world champions France, Denmark and eventual tournament revelation Senegal. After a defeat to Denmark and a 0-0 draw with France, Uruguay had to beat Senegal to make it to the next round. Despite coming back from a 0-3 at half time, Richard Morales narrowly missed a fourth goal with the goalkeeper down, which left Uruguay in 3rd place and out of the next round.