He played all or part of seven seasons in Major League Baseball (MLB), from 1983 to 1989, for the Houston Astros, Chicago White Sox, St. Louis Cardinals, Philadelphia Phillies, and Oakland Athletics.

Over the next six seasons, he worked his way up through the Reds' farm system as a starting pitcher, pitching substantially in relief only in 1980 with the Indianapolis Indians.

During spring training in 1983, he was traded to the Astros along with infielder Tony Walker in exchange for backup catcher Alan Knicely.

Dawley's numbers continued to decline as he posted an ERA of 4.47 while losing a career-high eight games against five wins, and he was left off the team's postseason roster.

He started the season with the Tacoma Tigers, where he earned a return trip to the majors by posting a 3–1 record with 3 saves and a 2.56 ERA along with 44 strikeouts in 38.2 innings pitched.