A left back, Houston's first professional club were Chelsea, but he failed to break into the first team and only made 14 appearances in five years. He was sold to Brentford in 1972. A year later he signed for Manchester United, for whom he made 250 appearances (including 2 substitute appearances) and scored 16 goals.
While he was at Old Trafford, Houston helped United win the Football League Second Division in 1975 and the FA Cup in 1977. He joined Sheffield United in 1980, before ending his playing career with Colchester United. He also played international football for Scotland, making one appearance in 1976.
Houston was assistant manager to George Graham at Arsenal from 1990, and was twice the club's caretaker-manager: first for three months in 1995 after Graham's sacking in February 1995. Houston took his team to the final of the Cup Winners' Cup, but the Gunners lost to a last-minute goal from Nayim.
Arsenal appointed Bruce Rioch in the summer of 1995, but Houston remained on as his assistant. Just over a year after his appointment, Rioch was sacked, and Houston was reappointed as caretaker, while Rioch's designated successor, Arsène Wenger, waited to finish his contract at Grampus Eight. However, Houston did not wait for Wenger's arrival, resigning his Arsenal post in mid-September to take over as manager of Queens Park Rangers, with Rioch becoming his assistant.
QPR, who had just been relegated to Division One, were aiming for a return to the Premiership, but Houston's spell at the club was not a success; he was sacked as manager in December 1997 with the club in the relegation zone.
Houston then went to Ipswich, as George Burley's first team coach, but was later reunited with George Graham in March 1999 at Tottenham Hotspur. Houston left the club two weeks after Graham was sacked in March 2001. He has since spent a brief period as first-team coach of Walsall.
In August 2008 it was reported that Stewart Houston was back at Arsenal, some 12 years after leaving the club, when he was rumoured to be scouting for the club. The Daily Mirror claimed Houston had been keeping tabs on Ipswich striker Danny Haynes.