After the war, although still officially on the books of Liverpool where he had been offered the post of Assistant Manager, he accepted the position of Manager at Manchester United on 19th February 1945, joining the Club on his demobilisation in October 1945. In doing so he filled a post left vacant since the resignation of A. Scott Duncan in 1937 and temporarily filled by Club Secretary Walter Crickmer. After demob Busby took charge of a Club bombed out and derelict and with a £15,000 overdraft. His first signing for the club was Jimmy Murphy, who was to be a great servant of the club serving as Assistant Manager until 1971. Ironically Murphy was Matt Busby's opposing number in that single international appearance back in 1933. Together they created United's first great post-war team built around the defensive capabilities of Johnny Carey, John Aston and Allenby Chilton together with the attacking skills of Charlie Mitten, Jack Rowley and Stan Pearson. League Runners-up in 1947, 1948 and 1949, United were FA Cup Winners in 1948 defeating Blackpool 4-2. Runners-up again in 1951, the title flag eventually came to Old Trafford in 1952.

Matt Busby and Jimmy Murphy had been quietly planning for the future and the day when this great team would be reaching the end of the road. In 1947 a youth policy was organised based on the pre-war successes of the MUJACs and the scouting system was expanded and reorganised. The early 1950s saw the first fruits of this policy as Jeff Whitefoot, Jackie Blanchflower and Roger Byrne broke into the first team. By 1953 a new team was being blooded in the First Division as Bill Foulkes, Mark Jones, David Pegg, Liam Whelan, Eddie Colman and Duncan Edwards all broke through. League success soon followed as this new young side, soon christened the 'Busby Babes', won the League in both 1956 and 1957 and were Cup Finalists in 1957.

Busby was still looking to the future, trailblazing the way for English Clubs in Europe by entering the European Cup. Defiantly ignoring the threats of the Football League, United reached the semi-finals of the competition losing to eventual winners, Real Madrid. The following season started with high hopes but was overshadowed by tragedy at Munich. United, still challenging in all three competitions, suffered the loss of 8 players, the club Secretary, trainer and coach. Matt Busby too almost perished. Twice given the Last Rites, he survived to see the team rebuilt by Jimmy Murphy reach the FA Cup Final. Murphy, who had missed the tragedy at Munich because of his commitments as Manager of the Welsh national side, brilliantly guided his patched up team to an emotionally charged Wembley Final versus Bolton Wanderers, losing 2-0.

Returning to take up the reins of management in August 1958, Busby began to add some big money purchases to his homegrown talent. Players including Albert Quixall, Noel Cantwell, Denis Law and Pat Crerand joined United in the late 1950s and early 1960s. Despite poor League form United fought through to a 3-1 F.A. Cup Final victory over Leicester City in 1963. A Championship was won in 1965 followed by a second in 1967. Since he first entered United for the European Cup it had always been Matt Busby's dream to win this prestigious trophy. After each of United's Championship victories, in 1956, 1957 and 1965, United had been eliminated at the semifinal stage. This time however United eventually reached the European Cup Final to play Benfica at Wembley. On a night of emotion United defeated the Portuguese giants 4-1 after extra-time to give Busby victory in what was probably his last chance as a Manager. It was a fitting tribute to the players and staff killed and injured 10 years before and was Matt Busby's crowning achievement as Manager of Manchester United. The following season he took United yet again to the semifinal stage of the European Cup.

After 23 years as Manager Sir Matt Busby announced that he would be retiring at the end of 1968-69 season. Relinquishing his coaching duties as Wilf McGuinness took over as Manager, Sir Matt Busby became General Manager of the Club. His retirement was brief, ending on 28th December 1970, with the Directors' inviting him to take over again until the end of the season. Then Sir Matt announced his retirement and became a Director of the Club, a position he held until 1982.

A respected figure throughout his career, Sir Matt Busby was awarded the CBE in 1958, made the 66th Freeman of Manchester in 1967, was knighted after United's European Cup victory in 1968, and in 1972 he was made a Knight Commander of St. Gregory by the Pope. He became President of Manchester United in 1980, was elected Vice-President of the Football League in 1982 and went on to become a life member. He also won the Manager of the Year Award in 1968. In 1993 Warwick Road North was renamed Sir Matt Busby Way in honour of the man described as 'Mister Manchester United'.

In addition to managing United he also guided the British Olympic football team to a semi-final place in the 1948 Olympics and in 1958 was Manager of Scotland, giving an 18 year old by the name of Denis Law his first cap.

After a short illness Sir Matt Busby died on 20th January 1994 at Alexandra Hospital, Cheadle. His funeral a week later saw thousands line the streets of Manchester as his cortege drove from Chorlton to Old Trafford and finally to Manchester's Southern Cemetery. Tributes to Sir Matt Busby came from around the world. Perhaps the most poignant came not from the famous but from the ordinary fans, supporters of many different Clubs, who sent thousands of shirts, wreaths, pictures and especially scarves creating a multi-coloured memorial to one of the greatest Club Managers the world of football has seen. A bronze statue of Sir Matt Busby was unveiled on 27th April 1996 at the Scoreboard End of Old Trafford as Manchester United remembered the man who epitomised the Club.