In the 2005 off-season, Silva joined G.D. Estoril Praia, where he remained until his retirement six years later, always in the second level. He played his last match on 2 January 2011, a 0–1 home loss against F.C. Penafiel for the campaign’s Taça da Liga.

On 10 June 2011, immediately after retiring, Silva was appointed director of football at Estoril. However, early into the season, he replaced Vinícius Eutrópio as manager, with the Cascais team ranking tenth in the second tier. His first game in charge was a 1–3 defeat at Penafiel and, after losing only three matches in 24, he helped the club return to the top flight after seven years, as champions. He ultimately was chosen as the league’s Manager of the Year.

Silva made his debut in the Portuguese top division on 17 August 2012, in a 1–2 away defeat to S.C. Olhanense. Estoril overachieved for a second best-ever fifth place in the table, with the subsequent qualification to the UEFA Europa League, also a first. Highlights included not losing any of the games against Sporting CP (3–1 at home, 2–2 away), and drawing at S.L. Benfica 1–1.

On 23 February 2014, Estoril achieved an historic first-time win at the Estádio do Dragão, the 1–0 victory – where he was sent off midway through the second half – being FC Porto’s first home defeat since the 2–3 against Leixões S.C. in 2008. He left his position on 12 May, after leading his team to the fourth position.

Silva agreed to a four-year contract with Sporting on 21 May 2014, replacing Leonardo Jardim who left for AS Monaco FC. He led the team to the third place in the championship, also winning the Taça de Portugal by beating S.C. Braga 3–1 on penalties after a 2–2 draw in the final– this was the club’s first piece of silverware since the 2008 Supertaça Cândido de Oliveira.

On 4 June 2015, four days after winning the trophy, Sporting announced that Silva had been dismissed with just cause, for not wearing their official suit in a cup match against F.C. Vizela.

On 8 July 2015, Silva was appointed the successor of countryman Vítor Pereira at Olympiacos FC, signing on a two-year contract. His first competitive game occurred in the season opener in the Super League Greece, won 3–0 against Panionios FC. On 16 September, he played his first UEFA Champions League match with his new club, losing 0–3 at home to FC Bayern Munich in the group stage.

Silva quit his job on 23 June 2016, alleging personal reasons.

On 5 January 2017, Silva was appointed as the head coach of Hull City until the end of the season, replacing Mike Phelan who was dismissed with the team bottom of the Premier League. Upon his appointment, vice-chairman Ehab Allam said: “He has a great track record and we feel this is a bold and exciting appointment in our aim to retain the club’s Premier League status”. Silva brought in his own coaching team, including assistant João Pedro Sousa, first-team coach Gonçalo Pedro and goalkeeping coach Hugo Oliveira.

On 26 January 2017, Silva’s Hull defeated a Manchester United team, coached by Portuguese compatriot José Mourinho, 2–1 in the semi-finals of the EFL Cup, giving the club its first victory over that opponent since 1974. However, due to the latter’s 2–0 win in the first-leg of the tie, the former failed to advance to the final, but on 4 February they beat Liverpool 2–0 in the domestic league, giving the coach four wins from his first four home matches as manager.

In March 2017, Silva stated that he wanted to end the groundshare agreement with rugby league club Hull F.C. at the KCOM Stadium, as the latter played on Friday and affected the pitch quality for his team at the weekend. On 25 May, after the team’s relegation, he resigned.

On 27 May 2017, it was confirmed Silva would join Premier League club Watford as head coach on a two-year contract. After a good start to the season, he was tracked for the vacant managerial position at Everton in November. During this period and in the subsequent two months, the team’s performances became increasingly poor (five points from 30 in ten Premier League matches), with fans citing his loss of focus as putting them at risk of relegation.

Silva was dismissed by Watford on 21 January 2018, with the club citing the “unwarranted approach by a Premier League rival” that caused “significant deterioration in both focus and results to the point where the long-term future of Watford FC has been jeopardised”. In February 2019, Everton agreed to pay Watford £4 million in compensation in response to this claim.

Silva was confirmed as manager of Everton on 31 May 2018, on a three-year contract. His first game in charge was a 22–0 win in a pre-season friendly over Austrian amateurs ATV Irdning.

On 21 April 2019, Silva guided his side to a 4–0 defeat of Manchester United, making this the Toffees’ largest victory over that opposition in all competitions since their 5–0 victory in October 1984. His first season at Goodison Park ended with an eighth-place finish, the same position that they achieved under Sam Allardyce a year earlier.

Silva was sacked on 5 December 2019, after a 5–2 defeat to city rivals Liverpool which left the team in 18th place.