Fahey began her coaching career shortly after graduating from Wisconsin. She was hired as the girls' basketball coach at Johnsburg High School in 1982. Her final two years at the program, she led the Lady Skyhawks to 20-win seasons and regional championships both years.
Washington University
In 1986, Fahey was named as head women's basketball coach at Washington University. She found some success in her first season, going 16-5. The school joined in the newly-created University Athletic Association and competition started in the 1987-1988 season. Washington won the first three and seven of the first eight UAA championships, making the NCAA Division III Women's Basketball Tournament seven of eight years as well. In 1991, despite finishing second in the UAA, Fahey made her first NCAA Tournament run, finishing in fourth place after losing in the Final Four to St. Thomas and the third-place game to Eastern Connecticut. In 1994, the Bears made another deep run into the tournament, this time making the championship game before losing to Capital University. The 1997-98 season began a new era for Fahey. The Bears went 28-2, winning the national championship over Southern Maine 77-69. The next season, they went an undefeated 30-0, winning the national championship over Saint Benedict 74-65. The next year was much of the same, going 30-0 once again and winning a third straight national championship, this time once again over Southern Maine 79-33. In 2000-01, the team failed to go undefeated, but finished at 28-2 and won their fourth straight national championship over Messiah College 67-45. Washington won the UAA conference every year from 1997-98 to 2006-07, again going to the national championship game in 2007. However, they lost to DePauw 55-52. The 2007-08 season was the first time the Bears failed to win 20 games in a season since the national championship run, going 19-8 and finishing second in the conference. However, they rebounded the next year, going 26-5 and losing the national championship game to George Fox University 60-53. In 2009-10, the Bears made their fifth national championship run, this time finishing the season at 29-2 and defeating Hope College 65-59 to take home the title. The following year, despite finishing second in the UAA, the team went to the national championship game for the third consecutive year, losing to Amherst 64-55. Over the next seven seasons, Fahey would lead Washington University to another four conference championships and advance to the quarterfinals twice. After winning her fifth national championship, Fahey became the first NCAA Division III coach to be admitted to the Women's Basketball Hall of Fame in the Class of 2012.
University of Illinois
On March 22, 2017, Fahey was named as head women's basketball coach at the University of Illinois, following former Washington University athletic director Josh Whitman to the school after he left for Illinois the previous year.