Nebraska was ranked No. 1 to open the 1976 season but managed only to tie LSU, 6–6, in a game at Tiger Stadium on September 11. The two teams were said to have waged "unrelenting trench warfare". Ferragamo capped his college career by leading the Cornhuskers to a victory over Texas Tech in the Astro-Bluebonnet Bowl in the Houston Astrodome.
Ferragamo enjoyed his best statistical season in 1980 in which he threw for 30 touchdowns, tied for second most in the NFL. The Rams again made the playoffs, but were defeated by Dallas, 34–13 in an NFC Wild Card Playoff game.
Ferragamo played for the Montreal Alouettes of the Canadian Football League (CFL) for just one season in 1981. He was signed to a large contract by both CFL and NFL standards at the time ($600,000, compared to $250,000 the Rams offered him, and the $47,500 they had paid him for 1980.) However, Ferragamo had a difficult time adjusting to the style of Canadian football. Montreal went on to win only three games against 13 losses (but did reach the playoffs due to weak East Division that season). He was demoted to backup to Gerry Dattilio in the latter half of the season and then third string quarterback for the final three games after Ken Johnson arrived in a trade. Ferragamo's last game in the CFL was a loss to the Ottawa Rough Riders in the Eastern semi-final which he watched from the pressbox. His stats during his one season in Montreal were 175 of 342 passes completed (51.2%) for 2175 yards, with seven touchdown passes and 25 interceptions.
On December 26, 1982, Ferragamo threw for 509 yards in a game against the Chicago Bears, at the time the second highest mark for passing yards in a game in league history behind former Ram Norm Van Brocklin. It was the third time in league history that a quarterback had passed for over 500 yards in a game, following Van Brocklin in 1951 (554 yards) and Y. A. Tittle in 1962 (505 yards). Subsequent to his return, Ferragamo led the Rams back to the NFL playoffs during the 1983 season behind the running of rookie Eric Dickerson. After beating the favored Cowboys in Irving in the wild card matchup 24–17, Ferragamo and the Rams were drubbed by the defending Super Bowl champion and Super Bowl-bound Washington Redskins by the score of 51–7.
In 1984, Ferragamo again started out as the Rams' starting quarterback. But in a 24–14 loss at Pittsburgh in Week 3, Ferragamo broke his right hand and did not return to the lineup for the remainder of the season. He would never play for the Los Angeles Rams again, playing the next two seasons with the Buffalo Bills and the Green Bay Packers.
He has been featured on the cover of Sports Illustrated twice, once in 1980 and again in 1981.