McGhee played for many Scottish and English clubs, before he had to retire because of injury. He started his playing career at Greenock Morton before moving on to Newcastle United, Aberdeen, Hamburg, Celtic, IK Brage and Reading and won the Scottish PFA Players' Player of the Year in 1982 as well as four caps and two goals for the Scotland national football team. His greatest career moment came in 1983 when he was in the Aberdeen side that defeated Real Madrid 2-1 to lift the European Cup Winner's Cup.