Callaghan was appointed as Bohemians manager on 31 December 2011. Despite financial constraints at the club, he led his team to a comfortable midtable finish in a season that included a 4–0 victory over Shamrock Rovers and Bohs' first league win in Tallaght Stadium. He was rewarded for this good season by being offered a two-year contract extension by the Bohs board of directors, which he signed in November 2012. On 15 July 2013 Callaghan was relieved of his duties by the club's board of directors.