Koetter was the head coach for three seasons at Boise State from 1998 to 2000, then moved to Oklahoma State for 3 days then to Arizona State in 2001. His record with the Broncos was 26–10 (.722), with two Big West Conference titles and two bowl victories. At Arizona State, Koetter compiled a 40–34 (.541) record, and four winning seasons in six years. Under Koetter, the Sun Devils became known for a vertical passing attack. He held a 1–11 record against top 10 teams, and was 2–19 (.095) against ranked teams. On November 26, 2006, The Arizona Republic reported that Koetter was being terminated as ASU football coach. His final game was the 2006 Hawaii Bowl on Christmas Eve, a 41–24 loss.
In 2007, Koetter accepted the position of offensive coordinator for the Jacksonville Jaguars of the National Football League (NFL). In his first season with the Jaguars, the offense improved from tenth in the league (338.9 yards per game) to seventh (357.4 yards per game). Koetter has been instrumental in the development of Jaguars offensive players Maurice Jones-Drew, Mike Sims-Walker, and Marcedes Lewis. Koetter was named, in addition to his duties as offensive coordinator, as the team's quarterbacks coach on November 30, 2011, with the firing of wide receivers coach Johnny Cox and the switch of quarterbacks coach Mike Sheppard to wide receivers coach.
On January 15, 2012, Koetter was hired as the offensive coordinator for the Atlanta Falcons. On January 2, 2013, the Atlanta Falcons signed Koetter to a contract extension that runs through the 2014 season.