In his early years, Steffen played for the youth team of his home town Würzburg, before joining the Bayern Munich Junior Team in 1997. After leading the team to a championship and a runner-up finish in the German Youth Leagues, he received a chance to play in the second team of Bayern Munich in 2000. After scoring 12 goals in 36 games for the second team, he got a chance to play for Bayern Munich's first team on 27 October 2001 in their game against 1. FC Köln, where he came in the game as a substitute for Claudio Pizarro in the 90th minute. This was his only game for the first team.
In 2002, he joined the Austrian team SK Rapid Wien and quickly became the team's fan favourite. He also formed the leagues best midfield duo along with Andreas Ivanschitz and the two led the team to his 31st league championship in 2005 and to the group stage of the UEFA Champions League in 2006. After finishing last in their group and the transfer of his team mate Ivanschitz, Steffen decided to join the German club TSV 1860 München in January 2006, but after desperately trying to find his form there, he returned to Rapid Wien in the summer. After his return, he got injured in the first game of the season and therefore missed half the season. His comeback came in late October and is since then one of the key players and the captain of Rapid Wien. He is also called "soccer-god" by the fans because of his technical skills, his commitment in the game and his endurance (He did not miss a minute of the 2008 season). Hofmann is also known as a player who rather passes the ball to a better positioned player than shooting at the goal himself. On 21 October 2010, he netted the second goal to help his side to a 2–0 away win against Bulgarian club CSKA Sofia in a UEFA Europa League match.
The Austrian Football Association tried in 2005 to let Hofmann, who was born in Germany but is married to an Austrian, to play for the Austrian national team. Hofmann agreed, but the transfer of rights was refused by FIFA as Hofmann had played several games for Germany in his youth. After the episode, Hofmann did not attain the Austrian citizenship and was chosen to represent Germany during the team's Asian tour in late 2005. However, due to illness he could not take part and has not been nominated since despite declaring interest.