Swindon Town manager Lou Macari signed Calderwood from Mansfield Town in 1985, with a Football League tribunal setting the fee at £27,500.

The 21-year-old Calderwood was installed as the club captain, and he made his debut on the first day of the season, a 1–0 defeat at Wrexham on 17 August 1985. Although that season started badly, it ended with the Town breaking the League points record as they won the Fourth Division title. Calderwood’s performance in Swindon Town’s defence won him the Adver Player of the Year award from the Swindon Advertiser.

As Swindon gradually improved in Division Two, Calderwood led the defence, missing only thirteen league games over the next three years. At the end of this period, he led the Town to their first promotion to the top flight, after beating Sunderland in the playoff final at Wembley in 1990. Shortly afterwards, Swindon were demoted to the Third Division due to an irregular payments scandal. The club were reinstated to the Second Division after an appeal. Calderwood was arrested and questioned by the police with regard to the scandal, though was not ultimately charged with anything.

Despite not being part of Tottenham’s squad for the 1999 Football League Cup Final he made four appearances during their victorious League Cup campaign. Two days after the final Calderwood moved on from Tottenham in March 1999, signing for Aston Villa. He then had brief spells with Nottingham Forest and Notts County before retiring. Calderwood’s career was brought to an end by a broken leg suffered while with Nottingham Forest.

Upon retirement as a player, Calderwood became reserve team manager at Tottenham. He became manager of Northampton Town on 9 October 2003. In his first two seasons in charge, Northampton reached the promotion playoffs. They finally won promotion in 2006 by finishing second in League Two, setting a new club record for clean sheets in a single season, with 25.

Calderwood was appointed as manager by Nottingham Forest in May 2006. Calderwood enjoyed an unbeaten league start to his Forest campaign and won the managerial monthly award for August 2006. Forest led League One by seven points in late November 2006. This lead was squandered, and the club finished in fourth place, 11 points behind leaders Scunthorpe United. Forest lost 5–4 on aggregate to Yeovil Town in the promotion playoffs.

Calderwood was sacked by Forest in December 2008, as the club had secured just four wins by Christmas.

Calderwood was appointed first team coach at Newcastle United on 26 January 2009. Newcastle were relegated from the Premier League at the end of the season. Calderwood then worked as an assistant manager to Chris Hughton as Newcastle gained promotion back to the Premier League at the first attempt by winning the 2009–10 Football League Championship.

On 18 October 2010, Calderwood left Newcastle to become manager of Edinburgh side Hibernian. After three losses in his first three matches in charge, including an Edinburgh derby defeat by rivals Hearts, Calderwood’s first win as Hibs boss came in a shock 3–0 win against Rangers at Ibrox. Despite this surprise victory, Calderwood suffered criticism after Hibs went on a poor run of results, winning just two of his first fourteen matches as manager. This prompted speculation that he had offered to resign, which was denied. A five match winning run lifted Hibs up into eighth place in the SPL and earned Calderwood the SPL monthly award for February 2011. Hibs finished the 2010–11 season in tenth place.

In June 2011, Birmingham City and Nottingham Forest both approached Hibs with a view to appointing Calderwood as their assistant manager. Calderwood was sacked by Hibs on 6 November 2011, having won just 12 games out of 49.

Calderwood was appointed assistant manager at Championship club Birmingham City on 24 November 2011, working with Chris Hughton for a third time. When Hughton left for Premier League club Norwich City on 7 June 2012, Calderwood went with him as assistant manager. He left the club when Hughton was dismissed on 6 April 2014.

In early February 2015, he was appointed assistant manager at Brighton & Hove Albion, rejoining Hughton for a fourth time. He resigned from the club on 12 November 2016 to take up a position elsewhere. After Brighton played out a 1–1 draw with Aston Villa on 18 November, it was confirmed that Calderwood would become assistant manager at Villa, working with Steve Bruce.

Calderwood was appointed manager at Cambridge United on 19 December 2018. He joined the club on an initial 18-month contract. Cambridge avoided relegation in his initial period in charge.

Calderwood signed 11 new players ahead of the 2019–20 season. His new-look squad had a goalless draw at Bradford City on the opening day, before upsetting Championship side Brentford in the League Cup first round in a penalty shootout. After a 4–0 win at Mansfield Town, Calderwood signed a two-year contract extension with Cambridge on 20 September 2019. The team then had a poor run of results and he was sacked by Cambridge on 29 January 2020, following a 4–0 defeat to Salford City. He left with the team 18th in EFL League Two.