Ghaly is a product of Al Ahly youth team, and he broke into the first team squad in 1997, he was only 16 when he joined the first team. He played regularly for Al-Ahly until he moved to Feyenoord Rotterdam in 2003, despite interest from numerous other European clubs such as VfB Stuttgart and FC Nantes. The transfer fee was said to be around €1.4 million.

After three troublesome seasons in the Netherlands, Ghaly joined Tottenham Hotspur of the Premier League in January 2006. Their rivals Arsenal had been interested before he signed a four-and-a-half-year contract at Tottenham.

Ghaly was given the number 14 jersey and made his debut against Manchester United at Old Trafford on 9 September 2006. He scored his first goal for Spurs in the UEFA Cup against Beşiktaş on 19 October 2006. During a game against rivals Chelsea on 11 March 2007, he gave Spurs a temporary 3–1 lead in the FA Cup. A week later Ghaly scored his only Premier League goal, in a 3–1 win over Watford. A foul on Ghaly in the middle of the penalty box against Blackburn Rovers saw Jermain Defoe score a penalty kick which resulted in the game ending in 1–1 draw. Ghaly’s second encounter with Blackburn however is remembered merely due to its affiliation with infamy.

His future at Tottenham was left in doubt after he pulled off his shirt and threw it to the ground after being substituted during a Premier League match against Blackburn on 10 May 2007. Ghaly had been brought on in the first half after an injury to Steed Malbranque, and rebelled when brought off. The Tottenham fans were left angry at Ghaly’s reaction, singing “You’re not fit to wear the shirt” and he was disciplined by the club soon after. He issued the following apology: “I am just so angry with myself,” Ghaly told the official Spurs site. “I have always considered it an honour to wear the Tottenham shirt and I never intended to show any disrespect”.

In July 2007, he was set to move to Birmingham City for a fee of £3 million (subject to work permit approval). However, on 3 August, Birmingham announced they would not be completing the deal after a training ground disagreement with manager Steve Bruce.

In January 2008, Derby County expressed an interest in Ghaly. They agreed terms with Tottenham Hotspur and the player to take him on loan until the end of the season. Ghaly made his debut during Derby’s 1–0 home defeat by Wigan Athletic on 12 January. After 12 games and the relegation of Derby to the Championship, Paul Jewell revealed he would not sign him as Ghaly wished to stay in the Premiership.

Despite not being given a squad number by Juande Ramos during his time at Tottenham, new appointment Harry Redknapp issued him with the number 15. On 2 January 2009, Ghaly was amongst the substitutes for Tottenham’s FA Cup 3rd Round tie against Wigan Athletic at White Hart Lane. Whilst warming up and preparing to be substituted on late in the second half, Ghaly was booed by a large amount of the Tottenham supporters. In light of this, manager Harry Redknapp decided against bringing him on.

On 22 January 2009, Hossam Ghaly completed a move to Saudi club Al-Nassr on a three-year deal.

On 6 July 2010, Ghaly completed a free transfer and signed a three-year contract with his first side, Al Ahly. There was a contest for his signature with archrivals Zamalek also making an offer. He retrieved his number 14 shirt along with the captain’s armband. In December, during a World Cup match, he became injured for six months, so he would not play for the rest of the season.

On 2 July 2013, Ghaly was signed on a free transfer to a one-year contract with Belgian Pro League team Lierse SK. The Egyptian league was later suspended due to political instability.

Ghaly returned to Al Ahly in 2014, where he played for three years, then he joined Saudi club Al-Nassr for one year, before returning to Al Ahly again in 2018, where he ended his career.