During his senior year at Mississippi State, he served as head coach of the boys' basketball team at Noxapater High School.

As the Ole Miss head coach, Chancellor guided the Rebels to the NCAA tournament 14 times, including 11 consecutive appearances from 1982 to 1992.

Chancellor led Ole Miss to the Elite Eight at the NCAA tournament four times, while his teams made the Sweet 16 on three other occasions.

Houston was bolstered by fellow player allocation Sheryl Swoopes (who had led Texas Tech to the 1993 NCAA title) and WNBA draft pick Tina Thompson to make a Big Three trio, all of whom would be inducted into the Naismith Memorial Basketball Hall of Fame.

They won four of their first seven games before closing out the season on a 14-7 run to finish 18-10, the best record of the eight teams; in the four-team playoff, they won both games (including a 65-51 victory over the New York Liberty, who had beaten Houston three out of four times in the regular season) to win the inaugural WNBA championship.

Chancellor cited the help of NBA coach Rudy Tomjanovich in asserting the importance of training camp and the nature of motivating college players.

The 1999 season, wracked with emotional turmoil due to the diagnosis of lung cancer for Perrot (which led to her passing on August 19), saw them go 26-6 before they rolled to a third straight title with four playoff wins to two losses.

They swept their first-round opponent to have a key matchup with the Los Angeles Sparks, who had only lost four games all year.

They were the first basketball team to win four straight league titles since the Boston Celtics in the late 1960s and the first four-peat since the 1980-1983 New York Islanders.

In his ten seasons with the Houston Comets, Chancellor posted a 211–111 record (.655), making him the winningest coach in the history of the WNBA until 2013.

During his time as head coach of the Comets, Chancellor also served as a television analyst for women's college basketball, working for both ESPN and SEC-TV.

The game remained close, and it was within three points with just over twelve seconds to go, but Swoopes was fouled and sank the free throws to give the USA a 79–74 win and the gold medal.

In his first year as head coach at LSU, Chancellor led the Lady Tigers to an SEC championship game and to the Final Four.

In 2022, he joined Houston Baptist University as a color commentator for its men and women's basketball home games.