In 1990, Arturo Salah was appointed as the manager of the Chilean national team, and he hired Pellegrini as his assistant coach and manager of the under-20 team. In 1990, Pellegrini was appointed manager of Palestino, where he stayed until 1992. Then, in 1992, he took on managership of O'Higgins for a year, before moving in 1993 to become coach of Universidad Católica, one of the most popular clubs in Chile. There he managed well-known players such as Alberto Acosta and Nestor Gorosito and took the team to victory in the prestigious Copa Interamericana in 1994 and the 1995 Copa Chile, though he could only finish as runner-up in 1994 and 1995 of the local Campeonato Nacional championship, a competition organized by the Chilean Football Federation in parallel to the Primera Division.