He is the technical director of Indian I-League 2nd Division side South United FC.
In his first season at Wimbledon, Phelan was a member of the team which won the FA Cup with a shock win over Liverpool in the final.
After five years at Wimbledon in which he made 198 appearances, Phelan was transferred to Manchester City for £2.5 million at the start of the 1992–93 season, equalling the British record transfer fee for a defender as well as equalling the club's record fee.
Arguably the best goal of Phelan's career came at Maine Road for City in an FA Cup tie against Tottenham Hotspur when the full-back ran the length of the pitch skipping several challenges and keeping his cool to slot home.
In October 2005, Phelan was named as player-coach of Otago United in the New Zealand Football Championship.
He then went on to become technical director of Bangalore Super Division club South United in August 2019.