Perkins accepted the immeasurable task of succeeding Bear Bryant as the head coach at his alma mater, the University of Alabama, when Bryant retired. He coached the Crimson Tide for four years from 1983 to 1986, compiling a record of 32–15–1 and winning three bowl games, but went 5–6 in 1984, the school's first losing season since 1957, the year before Bryant's tenure began. He held the distinction of being the only head coach to lead Alabama to a victory over the Fighting Irish of Notre Dame for nearly thirty years. There was controversy from unsatisfied boosters and alumni at Alabama, and a lucrative contract offer from the Tampa Bay Buccaneers led Perkins to leave Alabama for a second chance in the NFL after the 1986 Alabama season.
In 1992, former Alabama player Gene Jelks, who had been recruited by Perkins, publicly accused Alabama coaches and boosters of providing him with illegal cash payments and other inducements during his recruitment and years at Alabama (Jelks played from 1985–1989). Jelks's charges resulted in an National Collegiate Athletic Association (NCAA) investigation of the Alabama football program. Perkins's former assistant coach Jerry Pullen sued Jelks for slander, but he lost that case and two subsequent appeals, including an appeal to the Georgia Supreme Court.
Perkins coached Mike Shula at Alabama, and also for one season with the Tampa Bay Buccaneers. Shula was later hired as an assistant coach of the Buccaneers (1996–1999). Shula became a successor of Perkins's at Alabama as the head football coach there in 2003–2006.
Perkins was the first offensive coordinator for Don Coryell during Coryell's tenure with the San Diego Chargers. His replacement was Joe Gibbs.