From 1979 to 1981 he was the linebackers coach and defensive coordinator at Dunmore High School. In 1982 he was the defensive coordinator at Milford Academy, and in 1984 he became a defensive assistant coach for the Baltimore Stars of the United States Football League (USFL). From 1986 to 1994 he joined the NFL as the New Orleans Saints' linebackers coach, where he oversaw the Dome Patrol era of outstanding linebacker play. He then went on to become the defensive coordinator for the Carolina Panthers (1995–98), Indianapolis Colts (1999-01), and the Houston Texans (2002–05). In 2006 he was hired to become special assistant to head coach of the Baltimore Ravens. In 2010 he was the defensive coordinator for the Stanford Cardinal and in 2011 he followed Jim Harbaugh to the San Francisco 49ers when he was hired as the head coach. Along with Harbaugh, he was credited with turning around the 49ers defense, producing a league-high 35 turnovers in 2011.
Fangio was released from his contract by the San Francisco 49ers on Thursday, January 15, 2015 after head coach Jim Harbaugh was let go. On January 19, he agreed in principle to become the defensive coordinator for the Chicago Bears.