Fassel played briefly with The Hawaiians of the WFL in 1974, and became an assistant coach during the 1974 WFL season. He left the WFL after the '74 season, but briefly returned when the Hawaiians needed a quarterback late in the 1975 season. He played in the final game of the WFL for the Hawaiians, throwing the last pass in the league's history as the WFL folded three days later on October 22, 1975.
Fassel originally coached with Giants as an assistant in 1991 and 1992. Three weeks after the Giants won Super Bowl XXV, he was hired by Bill Parcells as their quarterback coach. In 1992, he was promoted to offensive coordinator.
During Fassel's tenure as head coach of the Giants, his teams were known for numerous post-season runs in December and for winning big games, such as a victory against the previously undefeated Denver Broncos in 1998. In 1997, he was named NFL coach of the year. He resurrected the career of quarterback Kerry Collins and received acclaim for his "playoff guarantee" in the 2000 season, during which he led the Giants to an improbable Super Bowl appearance.
His legacy as head coach for the Giants is mixed. Fassel's Giants were known for their disappointments against inferior teams in the regular season, as well as in the playoffs. The most notable loss was a 39–38 loss to the San Francisco 49ers in the 2002 postseason, in which they lost a 38–14 third quarter lead. During the 2003 season, injuries decimated the Giants and he was fired amidst some controversy.
Fassel joined the Ravens as an Offensive Consultant in 2004 to help with development of Kyle Boller. He became the Ravens offensive coordinator in 2005. Critics of Fassel have pointed to his lack of success as offensive coordinator after two seasons with the Ravens, in 2005 and part of 2006. During that time, the Ravens ranked near the bottom of the league in offense.
On October 17, 2006, Fassel was fired as offensive coordinator for the Ravens.
Fassel returned to the Locos in 2010 and helped lead the team to repeat as champions, again defeating the Tuskers in the 2010 UFL Championship Game. The Locos tried to three-peat in 2011, but this time fell to the Tuskers (who had since been relocated and renamed the Virginia Destroyers) in the 2011 UFL Championship Game. Fassel was the only current UFL head coach who was active in the league since its inauguration and was the Locos' head coach when the league suspended play in 2012.
Fassel entered broadcasting following his firing as offensive coordinator for the Ravens, joining Westwood One radio as a color commentator for its Sunday NFL action. He stayed with the network for two seasons, calling Sunday afternoon games with Harry Kalas in 2007 and Sunday Night Football with Dave Sims. Fassel was also part of Westwood One's playoff coverage those two years, calling various games, and worked the 2007 and 2008 NFC Championship Games with Bill Rosinski (2007) and Marv Albert (2008).
Fassel and his wife Kitty divorced in 2006 after years of counseling, but later reconciled and have remarried. They are the parents of John Fassel, currently the special teams coordinator for the Los Angeles Rams. They had four other children. One was placed for adoption before they were married; they were reunited with him in 2003.
Fassel is good friends with fellow coach Mike Holmgren, dating to their days as USC quarterbacks.