Phillips joined the Bolton Wanderers youth coaching staff whilst still a player for the team, starting his role as a coach on 1 June 2000,[3] then retired as a player a year later, though he played no matches during his final season as a registered player/coach.
On 9 October 2012, Phillips was appointed joint caretaker manager of Bolton alongside Sammy Lee following the sacking of Owen Coyle.
[5] His second match in caretaker charge came at Wolverhampton Wanderers Molineux Stadium which ended in a 2–2 draw with Mark Davies scoring a 90th-minute equaliser for Bolton.
On 23 October 2012, Crystal Palace confirmed that manager Dougie Freedman had left the club for Bolton Wanderers.
On 15 March 2016, he assumed interim charge of the Bolton team following the departure of Neil Lennon by mutual consent, and did the same in August 2019 after Phil Parkinson resigned.