After retirement from play, Williams served as manager of the Washington Senators, continuing with the team when they became the Texas Rangers after the 1971 season. Williams's best season as a manager was 1969 when he led the expansion Senators to an 86-76 record in their only winning season in Washington. He was chosen manager of the year after that season. Like many great players, Williams became impatient with ordinary athletes' abilities and attitudes, and his managerial career was short and largely unsuccessful. Before and after leaving Texas (which would be his only manager job), he occasionally appeared at Red Sox spring training as a guest hitting instructor.

He was much more successful in fishing. An avid and expert fly fisherman and deep-sea fisherman, he spent many summers after baseball fishing the Miramichi River, in Miramichi, New Brunswick, Canada. Williams was named to the International Game Fish Association Hall of Fame in 2000. Some opined that Williams was a rare individual who might have been the best in the world in three different disciplines: baseball hitter, fighter jet pilot, and fly fisherman. Shortly after Williams's death, conservative pundit Steve Sailer called him "possibly the most technically proficient American of the 20th Century, as his mastery of three highly different callings demonstrates." *

Williams reached an extensive deal with Sears, lending his name and talent toward marketing, developing, and endorsing a line of in-house sports equipment - specifically fishing, hunting and baseball equipment. He was also extensively involved in the Jimmy Fund, ironically later losing a brother to leukemia, and spent much of his spare time, effort, and money in support of the cancer organization.

In his later years, Williams became a fixture at autograph shows and card shows after his son (by his third wife), John Henry Williams, took control of his career, becoming his de facto manager. The younger Williams provided structure to his father's business affairs, and rationed his father's public appearances and memorabilia signings to maximize their earnings. Although many felt that Ted was being used by his son, there is no real evidence that the younger Williams was doing anything illicit or unsavory with his father's earnings.

One of Ted Williams's final, and most memorable, public appearances was at the 1999 All-Star Game in Boston. Able to walk only a short distance, Williams was brought to the pitcher's mound in a golf cart. He proudly waved his cap to the crowd—a gesture he had never done as a player. Fans responded with a standing ovation that lasted several minutes. At the pitcher's mound he was surrounded by players from both teams, and spoke with several. Among them was fellow San Diegan Tony Gwynn, a hitter often compared to Williams who starred with the major league edition of the San Diego Padres. The ceremony had to be cut short, as Williams's appearance threatened to delay the start of the game.

Later in the year, he was among the members of the Major League Baseball All-Century Team introduced to the crowd at Turner Field in Atlanta prior to Game 2 of the World Series. He had also been ranked that year as Number 8 on The Sporting News list of the 100 Greatest Baseball Players, where he was the highest-ranking left fielder.

In his last years Williams suffered from poor health, specifically cardiac problems. He had a pacemaker installed in November 2000 and underwent open-heart surgery in January 2001. After suffering a series of strokes and congestive heart failures, he died of cardiac arrest in Crystal River, Florida, on July 5, 2002.