Before his career as a manager, Hyballa coached various youth teams in his native Germany, including the U19 sides of Arminia Bielefeld, VfL Wolfsburg and Borussia Dortmund.

Hyballa was then appointed manager of NEC in 2016, where he quickly became known for his fanatical way of coaching, his controversial statements in interviews and behavior during matches.

Shorter spells with NAC Breda and Wisła Kraków followed, where he was dismissed after conflicts with management (in Poland with Jakub Blaszczykowski and Kazimierz Kmiecik).

In May 2021, he became the head coach of Danish club Esbjerg fB, but resigned a few months later amid clashes with first-team players and reports of physical and mental abuse.

[3][4] On 13 September 2011, Hyballa and his assistant coach Eric van der Luer were given leave of absence,[5] and their contracts were terminated by mutual agreement.

[7] From January 2012 to June 2012, Peter Hyballa was the coach of the Red Bull Salzburg reserves, where he was tasked with transitioning youth players to the first team.

[8] For the 2012–13 season, Hyballa signed a two-year contract with Sturm Graz,[9] but was dismissed while in the race for a UEFA Europa League spot on 22 April 2013.

[10] For the final games of the 2013–14 season, Hyballa returned to Germany as Sascha Lewandowski's assistant coach at Bayer Leverkusen.

[16] After the team ended up in the relegation zone after successive defeats, the board offered to place a more experienced manager alongside him in April 2017.

[19] Two days later, on 24 April 2017, he was dismissed, two matches prior to the end of the competition, due to poor results and imminent relegation.

However, he broke the contract in July 2018, after he was appointed head coach of Slovak Super Liga club DAC Dunajská Streda.

[25] The parting was preceded by a conflict with club legends Kazimierz Kmiecik and Jakub Błaszczykowski; the coach's results were also disappointing as Wisła was third from the bottom in the league standing when he left.

[30][31] One day later, Hyballa demoted four key players to the U19 team: Yuriy Yakovenko, Jakob Ankersen, Kevin Conboy and Zean Dalügge.

"[40] On 11 August after weeks of stories in the press and a bad start to the season, Hyballa resigned as manager of Esbjerg fB and was replaced by Roland Vrabec.

[45] After just two league matchdays, in a press conference following 4-0 away defeat to reigning champions of Slovan Bratislava, Hyballa was notably critical of the lack of quality and low transfer activity in the club.

[47] This marked his return to the Netherlands after leaving NAC in 2020 due to a conflict with then-technical director Tom van den Abbeele.