Berhalter was born in Englewood, New Jersey and grew up in Tenafly, New Jersey, and was a high school teammate of Claudio Reyna at Saint Benedict's Preparatory School in Newark, New Jersey. He played college soccer at the University of North Carolina at Chapel Hill. In 1993, he spent the collegiate off season playing for the Raleigh Flyers of the USISL.
Berhalter left UNC after his junior year, signing with Dutch club Zwolle in 1994. He later played for Sparta Rotterdam and SC Cambuur Leeuwarden in the Netherlands (later they had U.S. born executive Alex Pama also there), and with Crystal Palace in England (where he briefly played alongside Jovan Kirovski). During his time at Crystal Palace, he scored once against Bradford City.
In 2002, Berhalter signed with Energie Cottbus of the German Bundesliga. He went on to make 111 league appearances with the team, captaining them to a successful promotion back to the Bundesliga. In 2006, Berhalter signed with TSV 1860 München of the 2. Bundesliga, and was named captain of the team. He stayed there for a further two and a half years, making 73 league appearances for Die Löwen.
After a 15-year career in Europe, Berhalter moved back to the United States in April 2009. He signed a contract with Major League Soccer, his first club contract in his home country. He was revealed as a Los Angeles Galaxy player on April 3, 2009. In his first season with the Galaxy, their goals against were cut in half—from 61 to 30—with Berhalter being a leader in defense while successfully mentoring Omar Gonzalez to Rookie of the Year honors.
On November 14, 2009, he scored in the 103rd minute of the scoreless Western Conference final, propelling the Galaxy to a 2–0 win over the Houston Dynamo and into the 2009 MLS Cup. It was his first goal in 28 appearances with the club.
In his second season, the Galaxy won the MLS Supporters Shield and further reduced their goals against to 26 for the season, a Galaxy record.
On October 12, 2011, Berhalter announced his decision to retire at the end of the 2011 MLS season.
Berhalter earned his first cap for the U.S. national team on October 15, 1994, against Saudi Arabia. Berhalter played a significant role for the U.S. at the 2002 World Cup, stepping in for the injured Jeff Agoos and starting the last two games, and in doing so became the first Crystal Palace player to play in a World Cup match.
On May 25, 2006, Berhalter was added to the U.S. national team's roster for the 2006 World Cup, replacing the injured Cory Gibbs. Berhalter expressed confidence in the ability of the team in the run up to the tournament, but was an unused substitute in all three group games. The U.S. was eliminated after finishing at the bottom of Group E in the first round with one draw and two defeats.
Following a season as Los Angeles Galaxy's assistant coach, Berhalter was named head coach for Swedish club Hammarby IF on December 12, 2011. Berhalter's appointment was historic, as he was the first American to ever manage a professional soccer team in Europe. Berhalter was fired on July 24, 2013 for a "lack of attacking play".
Berhalter became the sporting director and head coach of Columbus Crew on November 16, 2013.As of September 16, 2017
Los Angeles Galaxy
MLS Cup: 2011
Major League Soccer Supporter's Shield: 2010, 2011
Major League Soccer Western Conference Championship: 2009, 2011