Schmid was named the first coach of the new expansion franchise, Seattle Sounders FC. In their 2009 inaugural season, Seattle defeated D.C. United to win the U.S. Open Cup. On October 24, 2009, Seattle defeated FC Dallas 2–1, giving Schmid his 125th career MLS regular season win; this win moved Schmid past Bob Bradley for the most wins in MLS history. He led Seattle to the playoffs where, in the first round, the Dynamo defeated the team 1–0 in overtime of the second leg. Seattle was the first expansion team to make the playoffs in an inaugural season since the 1998 Chicago Fire, when the league was just two years old.