Panagoulias returned to Greece in 1972 to serve as an assistant coach for the national team. He was promoted to the head coaching position in 1973, and remained in that job until 1981. He took over Greek giants Olympiakos and led the team to the Greek title in 1982 and 1983. In 1984, he returned to the US to coach the Olympic team in the Los Angeles games. From there, he became the senior national team manager.
Panagoulias returned to his homeland in the late 1980s, coaching Olympiakos again and Aris FC. In 1992, he was appointed to a second spell as national team boss. Panagoulias led the team to its one of its greatest ever moments, qualifying for the 1994 World Cup in the USA.
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