Blackpool

Thompson started coaching with the Centre of Excellence at Blackpool before becoming Head of the Youth Department in 2005. Following the appointment of Simon Grayson as Blackpool's manager Thompson was promoted to first team coach in 2006, and he coached the team in the 2006–07 season as the Seasiders were promoted to the Championship, making their first return to the second tier of English football for 29 years. In March 2008 he signed a new two-year extension to his contract at Bloomfield Road.^[5][6] In December 2008 following the departure of the Seasiders manager Simon Grayson to Leeds United, Thompson became the assistant manager on a caretaker basis, with Tony Parkes as the caretaker manager. After Parkes' first game in charge, a 1–1 Boxing Day draw against Sheffield Wednesday at Hillsborough, Parkes revealed that the Blackpool board was willing to give him the job full-time, with Thompson as his assistant, if the team continue to perform as they did under Grayson.^[7] Speaking of his role as assistant manager at what he considers to be his hometown club, Thompson said, "I am enjoying the responsibility and myself and Tony have been bouncing ideas off each other. Tony will probably make the major decisions but I am enjoying it because it is the club that I love. I am a local lad and I am just as excited doing what I'm doing now as Simon Grayson probably is at Leeds."^[8] When Ian Holloway became Blackpool manager in summer 2009, Thompson stayed on as his assistant.

Three and a half years later, when Holloway left to become manager of Crystal Palace, Thompson was appointed caretaker manager before the match at Derby County on 3 November. It was Holloway who had picked the team, however. After the match, which Blackpool lost 4–1, Thompson stated his interest in applying for the job on a full-time basis.^[9] Blackpool won their next fixture, with Thompson still in charge, 2–0 at Sheffield Wednesday.^[10]

He resumed his caretaker role two months later when Michael Appleton left to become manager of Blackburn Rovers. He picked the team to face Charlton Athletic on 12 January, but they lost 2–1.^[11]

Huddersfield Town

On 6 June 2014, Thompson was hired as Mark Robins' new assistant manager at Huddersfield Town. He retained the position under new Huddersfield Manager Chris Powell.

Leeds United

On 18 December 2014, Thompson was hired as Neil Redfearn's new assistant at Leeds United. On 2 April 2015, Thompson was suspended by then Leeds director of football, Nicola Salerno for an 'internal matter'. Head Coach Neil Redfearn was kept in the dark as to why Thompson had been suspended.^[12]

On 24 June 2015, on the day Salerno left the club,^[13] Salerno gave an interview to Sky Sports, saying about Thompson: "I had a bad relationship with Steve but I didn't speak to Massimo about him."^[14]

Preston North End

On 1 July 2015, Thompson was appointed first-team coach of newly promoted Football League Championship side Preston North End, reuniting him with manager Simon Grayson 2013–2017.^[15] and Alex Neil 2017–2022

Oldham Athletic

On 9 November 2022, it was announced that Thompson had been appointed as Head of Recruitment at his hometown club Oldham Athletic. On 17 September 2023, he was appointed interim manager following the sacking of David Unsworth.^[16] He held this caretaker position until 12 October with a managerial appointment imminent.^[17]