He took his UNLV teams to four Final Fours. In the first, in 1977 (only seven years after the program joined Division I), the Rebels lost to North Carolina in the semifinals. The Rebels averaged 109 points per game that season in an era before the shot clock or the three-point shot. However, Carolina controlled the tempo with coach Dean Smith's famous four corners offense, and the Rebels lost 84–83. Ten years later in the Final Four, UNLV was defeated by Bob Knight's Indiana Hoosiers, the eventual national champion. Finally, in the 1990 NCAA Men's Division I Basketball Tournament Tarkanian led UNLV to the championship, prevailing 103–73 against Duke while setting a record for margin of victory in a championship game. That season the team was heavily monitored by the NCAA, which visited their campus 11 times, and suspended 10 players at various times. The 1990–91 team appeared poised to repeat as champions after running their record to 34–0 while winning by an average margin of 27.3 points. However, a rematch against Duke in the national semifinals saw the Blue Devils prevail 79–77 after the Rebels' Anderson Hunt missed a 22-foot shot at the buzzer.
Tarkanian was offered the Los Angeles Lakers head coaching job in 1977, but declined, continuing to coach college basketball. Tarkanian was hired to coach the San Antonio Spurs in 1992, not long after leaving UNLV. However, he disagreed with Spurs owner Red McCombs over the need for experience at point guard. During the offseason, the Spurs had lost Rod Strickland to free agency, when he signed with Portland, leaving the Spurs without a point guard with significant NBA experience. The Spurs had signed Vinny Del Negro, a combo-guard from the Italian League, to replace Strickland. They also signed NBA journeyman Avery Johnson, formerly of the Houston Rockets, to a one-year contract. Tarkanian felt that the Spurs wouldn't be competitive without an experienced point guard, but McCombs disagreed. As a result, Tarkanian was fired after only 20 games with a 9–11 record. He received a $1.3 million settlement, which he used to fund a lawsuit against the NCAA.
Just months before the 1976–1977 season, the NCAA placed UNLV on two years' probation for "questionable practices." Although the alleged violations dated back to 1971—before Tarkanian became coach—the NCAA pressured UNLV into suspending Tarkanian as coach for two years. Tarkanian sued, claiming the suspension violated his right to due process. In October 1977, a Nevada judge issued an injunction that reinstated Tarkanian as coach. The case eventually made it all the way to the Supreme Court of the United States, which ruled in 1988 that the NCAA had the right to discipline its member schools, reversing the 1977 injunction.