A son of a coal miner from Swoyersville, Pennsylvania, Michaels was a two-sport athlete at the local high school, then went on to play collegiately as a fullback at Washington & Lee University. During the 1950 season, he helped the Generals reach the Gator Bowl, but was unable to play in the contest due to an appendicitis attack he suffered one week before the New Year's Day game. In the 1951 NFL draft, he was selected in the seventh round by the Cleveland Browns, but was traded to the Green Bay Packers during the summer training camp. Michaels was used primarily on special teams during his rookie season in Green Bay.
On April 29, 1952, Michaels was traded back to the Browns for three offensive linemen, and played a key role in the team's defense over the next decade at linebacker. Often used to call the defensive signals, Michaels intercepted 11 passes, including four in 1952, and also returned two of them for touchdowns. In those 10 years, Michaels helped the Browns play in five NFL Championship games, winning consecutive contests in 1954 and 1955.
On April 3, 1962, Michaels entered the coaching ranks when he was hired by the American Football League's Oakland Raiders as the team's defensive backs coach. He would spend only one season there, with the success he enjoyed with the Browns nowhere to be found. The Raiders lost their first 13 games before winning the season finale, playing in Frank Youell Field, a renovated high school stadium.
At the start of the 1963 season, Michaels signed with the American Football League's New York Jets, after playing in just one game, Michaels accepted the defensive coordinator's position with the revamped Jets under Weeb Ewbank, who had coached him at Cleveland. Within six years, the team defeated the Baltimore Colts in Super Bowl III, with Michaels seemingly the heir apparent to replace Ewbank, following the departure of fellow assistant Clive Rush.
However, Michaels' career fortunes changed dramatically on February 1, 1973, when Ewbank hired his son-in-law, Charley Winner, and designated him his successor after the upcoming season. Michaels immediately resigned and within two weeks later had signed to become the defensive coordinator of the Philadelphia Eagles, working under former Browns' teammate Mike McCormack.
Three mediocre seasons in Philadelphia followed, with McCormack and his staff dismissed at the end of the 1975 NFL season. After Winner was also dismissed as Jets head coach, Michaels returned to New York, again resuming his role as the main coach on defense under new head coach Lou Holtz.
Holtz's one season at the professional level turned out to be a disaster, leading him to resign in the days prior to the last game of the season. On January 4, 1977, Michaels was officially selected as head coach of the Jets, beginning six seasons of wildly contrasting results.
Michaels' first season saw the team win only three of 14 games, but over the next two years, the Jets managed to split their 16 contests in each year. The five-game improvement in 1978 was good enough to win Michaels the AFC Coach of the Year award.
The 1979 season was another 8-8 campaign that was marred by a quarterback controversy. Starter Richard Todd was demoted and new starter Matt Robinson was named for the season opener against the Cleveland Browns. But days before the game, Robinson injured his throwing-hand thumb and tried to hide the injury, but was forced to reveal it the night before the game. The thumb was treated and the Jets took a 22-19 lead in the final quarter. Robinson had the tape on his injured thumb removed thinking the game was over, but Brian Sipe led a game-tying Browns drive, and in overtime Robinson, unabe to grip the ball, threw a sloppy pass for Wesley Walker that was intercepted and turned into a Browns game-winning field goal. Michaels never used Robinson again even as Richard Todd got injured.
Another incident during 1979 illustrated the fragile dynamic of Michaels' tenure with the Jets. On November 26 the Jets were crushed 30-7 by the Seattle Seahawks in the Kingdome; one Seahawks score was set up when cornerback Cornell Webster blocked a Chuck Ramsey punt, this following a Jets turnover on a mishandled snap. Following the game Michaels called out Ramsey in front of teammates by snarling, "I can fart farther than you can kick!"
A rough 4-12 season in 1980 was followed by an 0-3 start the following year, and it combined to put Michaels' job in jeopardy, but the Jets surged to a 10-win season to secure their first playoff berth since 1969. The year's success ended with a defeat to the Buffalo Bills in the AFC Wild Card game.
During the strike-shortened 1982 NFL season, the Jets went 6-3, then pounded the Cincinnati Bengals 44-17 in the first round of that year's expanded playoff system. Traveling to face the top-seeded Los Angeles Raiders the following week, the Jets pulled off a 17-14 upset. One bizarre part of the game came off the field at halftime when Michaels received a call criticizing his team for dirty play. Michaels was incensed by the call and first accused Raiders' owner Al Davis of making the call. However, the call was later traced to a bar near New York by a gambler who had bet against the Jets.
One game away from Super Bowl XVII, the Jets arrived at Miami's Orange Bowl on January 23, 1983 to find that the field had not been covered, despite a heavy rain storm. The subsequent AFC Championship game became known as the "Mud Bowl", where the Jets lost a 14-0 to the Miami Dolphins.
On February 10, just 17 days after the loss to Miami, Michaels unexpectedly resigned, citing a need for a break from football. He had been under severe emotional strain during the last weeks of the 1982 regular season, taking time each week to visit his terminally ill mother in Pennsylvania. However, conspiracy theorists believed that the team's success was due to offensive coordinator Joe Walton, and that the pursuit of several teams for Walton forced the Jets to fire Michaels.
Michaels would then coach the New Jersey Generals in the USFL for two years beginning in 1984. One month after the conclusion of the 1985 season, Michaels and his staff were let go by Generals' team owner Donald Trump after the team merged with the Houston Gamblers.
In February 1987, Michaels claimed that he had been shut out of NFL coaching jobs after having been blackballed by the league's owners. On December 21, 1989, Michaels was hired as coach of the Helsinki franchise in the new International League of American Football, a developmental league and the forerunner of the now defunct World League of American Football.
After his tenure in the developmental league had ended, Michaels began working for a gambling-oriented television program that would make selections on NFL games, making future job opportunities in the NFL slim.