Carniglia was Real Madrid head coach from June 1957 to July 1959 with a two-month stop from February 1959 due to a renal colic. Madrid, at the time, had some of the greatest footballing talent in the world with Alfredo di Stéfano (holder of the Ballon d'Or at the time), Francisco Gento, Raymond Kopa and Héctor Rial. These greats were joined in 1957 by José Santamaría and Ferenc Puskás in 1958. Carniglia did not have a high opinion of Puskás when he arrived, as he had not played professionally in over a year and was considerably over weight. Carniglia whipped him into shape with Puskás losing 15 kg before his first La Liga game against Oviedo. Carniglia left Puskás out of the 1959 European cup final, which led to his being sacked by Santiago Bernabéu, the chairman of Real. Carniglia's time with Real was the most fruitful in his management career, winning the European Cup twice, in 1958 with a 3–2 win over A.C. Milan and in 1959 with a 2–0 win over Reims. He also won the La Liga title in 1958.