In 1979, UNAM agreed to exchange players during the off-season with the San Diego Sockers of the North American Soccer League. He played in the NASL during the summer and in the Mexican league during the fall, winter and spring. UNAM loaned Sánchez to the Sockers in 1979 and 1980 where he became a prolific striker for the Sockers, averaging nearly a goal a game.

After five successful seasons in Mexico, Sánchez drew the attention of several European sides, including that of English club Arsenal, though eventually signing with Spanish side Atlético Madrid in 1981. It took him a while to find his feet in La Liga, only managing twenty league appearances and scoring eight goals in his first season, but by the 1984–1985 season he was scoring regularly with a team that won the Copa del Rey, finished second in the league and won the Spanish Super Copa. That year, Sánchez won his first Pichichi trophy for being the most prolific scorer in the league, scoring 26 goals.

On 15 July 1985, Sánchez signed for Real Madrid. It was reported that due to Atlético Madrid’s reluctance to anger their fan base with a direct deal with Real, Sánchez was transferred to UNAM back in his home country on 4 July before being signed by Real Madrid, with the contract signing taking place in a bank in Mexico City. He was flown back to Spain and presented to 50,000 fans at the Santiago Bernabéu Stadium on 19 July.

He played alongside the famed group of players known as the La Quinta del Buitre (“Vulture’s Cohort”), which consisted of Emilio Butragueño, Manuel Sanchís, Martín Vázquez, Míchel, and Miguel Pardeza. With Los Blancos, Sánchez won five consecutive league titles from 1985 to 1990, a Copa del Rey title in 1989 and the UEFA Cup in 1986. During those five years, Sánchez won four-consecutive Pichichi trophies, becoming the only player in Spanish football history to achieve this without sharing the trophy with any other player in any season, and one of four players to win five Pichichis (the others being Alfredo Di Stéfano, Quini and Messi (whom has won 6)), scoring 208 goals in 283 games in all competitions. He scored 27 or more goals in four consecutive seasons between 1986 and 1990, including 38 goals in the 1989–90 season, tying the single-season record set in 1951 by Telmo Zarra and earning the European Golden Boot award for the best scorer in Europe. Remarkably, all 38 of these goals were scored with only a single touch. His 38-goal tally stood as a league record until Cristiano Ronaldo surpassed it after scoring 40 goals in the 2010–11 season. In European Cup competitions, Sánchez scored 47 goals in 45 matches.

In 1992, Sánchez returned to his native Mexico for a season and there he won the 1992 CONCACAF Champions’ Cup with Club América before playing for a variety of clubs in Spain, Austria and the USA. He played for Dallas Burn in the inaugural year of Major League Soccer, becoming one of two footballers, along with Roy Wegerle, to play outdoor football in both the NASL and the MLS. He finished his career playing for Atlético Celaya, along with Butragueño and Míchel, his old colleagues from Real Madrid.

Sánchez retired from Spanish football on 29 May 1997, playing with Real Madrid at the Santiago Bernabéu Stadium. His last official game was during the 1998 World Cup qualifiers, where he touched the ball as a symbol of his retirement.

In March 2000, Sánchez became manager of UNAM, who were struggling in the league, signing a two-year deal. Although the team went on to have a good campaign under his leadership, differences between the club president and Sánchez resulted in his sacking in August of that year.

After Jimenez Espriu resigned as the club president a year later, the new president, Luis Regueiro, appointed Sánchez as head coach in November 2001.

The success, however, was short lived. Pumas became the worst team of the tournament the following season and in Winter 2005 were having the worst year in its history. Sánchez decided to resign in November 2005.

Club Necaxa, another Mexican team, signed him as a head coach in 2006, and he also became the coach of the Mexico national team that year following their participation at the 2006 FIFA World Cup.

In 2006, Sánchez was appointed as the official FIFA/SOS Ambassador for Mexico, joining Wayne Rooney (Ambassador for England), Ruud van Nistelrooy (Netherlands), and fifty others in fund raising for the official 2006 FIFA World Cup Charity.

Sánchez’s first match as Mexico coach was a 2–0 loss to the United States in Phoenix, Arizona in February 2007. Sánchez recorded his first victory against Venezuela, a 3–1 win in front of 67,000 fans in San Diego. Hugo’s first game in Mexico took place against Paraguay in Monterrey on 25 March 2007, which Mexico won 2–1. A few days later on 28 March 2007, Mexico defeated Ecuador 4–2 in Oakland, California.

In June 2007 Sánchez coached Mexico in the 2007 edition of the Gold Cup, his first official competition. After struggling in the first stages of the tournament, México reached the final 24 June 2007 and lost 2–1 against the US.

On 27 June 2007, in the opening game of the 2007 Copa América held in Venezuela, Sánchez led the Mexico national team to a stunning 2–0 win Brazil, Hugo’s first major victory as a coach. After easing through the group stage of the tournament, Hugo led the team to the semi-finals (beating Paraguay 6–0 in the quarter-finals) where they were beaten 3–0 by Argentina. Mexico ended the tournament in third place by defeating Uruguay 3–1.

In August 2007, Sánchez announced that Mexico would permanently, or at least in his time coaching the team, drop their famous green home kit, replacing it with their white away kit, meaning that their new away kit would be red. For this decision, Sánchez was subject of a lot of criticism. The two main arguments against him were that the decision was breaking a long-standing Mexican tradition, yet the strongest critics suggested that he should devote more time to the strategy and training of the Mexico team rather than entertaining himself with superfluous features of the sport.

On 1 September 2007, Sánchez inaugurated a street with his name in Puebla, central Mexico, before a thousand of the locals around there.

In March 2008, Sánchez suffered poor results, including draws with Australia and Finland, and a loss at home in Querétaro against Ecuador’s U-23 team. Disappointing results continued in the CONCACAF Olympic Qualification, a draw with Canada and a loss to Guatemala. His only victory was a 5–1 win against Haiti. Mexico were eliminated from the Pre-Olympic qualifying tournament on goal difference.

On 31 March 2008, Hugo Sánchez was fired from his post as Mexican head coach.

He became coach of La Liga’s Almería in early 2009, but after accomplishing the goal of avoiding relegation from La Liga, and despite on 2 June 2009 the Almeria chairman Alfonso García announcing the renewal of his contract, he was released on 20 December 2009.

Hugo Sánchez is the son of Héctor Sánchez, who was also a footballer who played for Asturias F.C. and Atlante. Sánchez is currently married to Isabel (née Martín), and has two children, a son and an older daughter from his previous marriage. His son, Hugo Sánchez Portugal, was also a footballer and played for UNAM and Atlante. He also has two daughters from his current marriage. On 8 November 2014, Sánchez Portugal died from the effects of a gas leak in a Mexico City apartment as stated by the Mexican Red Cross.

An accurate penalty taker, Sánchez held the record for most penalties scored in La Liga with 56, until Cristiano Ronaldo broke the record in 2017 after scoring his 57th penalty-kick.