Van Gundy was a starting guard at Alhambra High School in Martinez, California in the San Francisco Bay Area. He played basketball for his father, Bill Van Gundy, at SUNY-Brockport, a Division III school, until he graduated in 1981 with a B.A. in English and a B.S. in Physical Education.
Van Gundy began his coaching career as an assistant coach at the University of Vermont, 1981–83, and was head coach at Castleton State College in Vermont for three seasons from 1983 to 1986. After his first season as Castleton head coach, the NAIA named Van Gundy the District 5 Coach of the Year. Castleton finished 1984–85 the top team in the NAIA's Mayflower Conference and won the NAIA District 5 tournament. After serving as an assistant coach at Canisius College in 1987 and Fordham University in 1988, Van Gundy was named head coach at the University of Lowell. During his four-season tenure at the school, which saw the institution become the University of Massachusetts Lowell, he compiled a record of 54–60 and coached Leo Parent, whom Van Gundy called "the best Division 2 player in the nation."
Van Gundy then became an assistant at the University of Wisconsin under Stu Jackson. When Jackson left after 2 years to become general manager of the expansion NBA Vancouver franchise, Van Gundy was promoted to replace him as head coach and given a 5-year contract. Coming off an 18–11 season with future NBA star Michael Finley back for his senior year and highly touted recruits coming in, the team went into the season with high expectations, but ended with a disappointing 13–14 record (7–11 and ninth place in the Big 10). Van Gundy was fired at the end of the season and given a buyout for the 4 years remaining on his contract. Van Gundy blamed financial concerns at the school for his firing. The team would go on to hire Dick Bennett from the University of Wisconsin–Green Bay and he finished his first year with a 17–15 record and NIT appearance despite losing Finley and other key players.
Overall, Van Gundy compiled a record of 135–92 (.595) in eight years as a college head coach.
Van Gundy spent twelve years with the Heat organization, beginning as an assistant coach to Pat Riley in 1995.
After working as an assistant under Riley, Van Gundy was named head coach when Riley abruptly resigned as coach prior to the 2003–04 season. However, Riley remained as President of the team. Van Gundy took over a team that had won 25 games the previous season. He led them to a 42-win season, in which they won a very high percentage of their late season games and surprised many by advancing to the second round of the 2004 NBA Playoffs, nearly defeating the team with the league's best record, the Indiana Pacers, due to the strong play of rookie Dwyane Wade.
During the off-season, Shaquille O'Neal demanded a trade and made Miami the only viable option for the Lakers to make a transaction with. Riley gave up Caron Butler, Lamar Odom, Brian Grant and a future first-round draft choice, replacing three of the team's starters, including an Olympian and a future all star, with O'Neal. Van Gundy led the Heat to the best record in the Eastern Conference in the first half of the season, becoming the first Heat coach to coach in the All-Star Game, where he led the East to a victory. The Heat finished the season with 59 wins, earning the best record in the conference. The Heat went on to advance to Game 7 of the Eastern Conference Finals, where they lost to the Detroit Pistons. Injuries played a factor in their defeat, particularly a rib injury to leading scorer Wade during Game 5, which prevented him from playing Game 6 and severely hindered him in Game 7, both Piston wins.
During the 2005 off-season, it was widely speculated that Pat Riley was attempting to run Van Gundy out of his coaching job and take over the job himself, now that the team was in a position to contend for the championship. Van Gundy would resign from his position as head coach on December 12, 2005, just 21 games into the season, citing a need to spend more time with his family. Riley replaced him as head coach, and led Miami to their first championship that same season.
In Shaquille O'Neal's book, "Shaq Uncut: My Story", O'Neal responded to allegations of being a "coach killer" and that he forced Van Gundy out of Miami by stating: "Stan got fired because Pat (Riley) wanted to take over, not because I wanted him out. I had no control over it — not a smidgen of control. We all kind of knew it was coming because Pat and Stan were always arguing. Pat would come down and tell Stan how to do something and Stan would want to do it his own way, and that was a fine game plan if you wanted to get yourself fired."
Though at the time of his resignation Van Gundy asserted he was not being forced out by Riley, he has more recently declined comment on the situation after he accepted a coaching job with the Orlando Magic less than two years later. Riley himself would resign from his coaching duties two years later, following a 15-67 season from the Heat.
In May 2007, Van Gundy received an offer to replace the fired Rick Carlisle as head coach of the Indiana Pacers. Van Gundy turned down the offer, but began interviewing for other head coaching jobs. He was considered a lead candidate to become head coach of the Orlando Magic and also the Sacramento Kings. However, the Magic hired Billy Donovan. Shortly thereafter, Donovan decided he wanted to back out of the deal and return to the University of Florida. Finally on June 5, 2007, the Magic released Donovan and offered another contract to Van Gundy. ESPN SportsCenter reported that the Miami Heat allowed Van Gundy to coach the Magic in exchange for a second-round draft pick in 2007 and the right to swap first-round picks in 2008 or another 2008 second-round draft pick and cash.
In Van Gundy's first season with the Magic, he guided them to a 52-win season, earning the team's first division championship since the 1995–96 season, and the third-best record in the Eastern Conference. Orlando defeated the Toronto Raptors 4–1 in the first round of the playoffs, advancing to the Eastern Semifinals for the first time in twelve seasons. They were later defeated in the Eastern Semifinals by the Detroit Pistons 4–1.
Van Gundy and the Magic won 59 games in 2008–09, the second most in franchise history, along with a second consecutive division championship. They defeated the 66–16 Cleveland Cavaliers in the Eastern Conference Finals in six games to advancing to the NBA Finals, Orlando's first Finals appearance since 1995. After suffering a blowout loss in game 1 against the Los Angeles Lakers, the Magic put up a better effort in game 2, but were defeated in overtime. In game 3, the Magic shot 63% for the game, a Finals record, en route to their first win in a Finals game in franchise history. They went on to lose the next two games as the Lakers won the series in five.
Also during the 2008–09 season, a bit of a feud developed between Van Gundy and Phoenix Suns center, and former Magic/Heat player, Shaquille O'Neal (the two were together when O'Neal played for the Heat and Van Gundy was his coach). After a game between the Suns and Magic, Van Gundy said O'Neal was flopping throughout the night. O'Neal fired back by calling Van Gundy "a master of panic," because Van Gundy was not successful in the playoffs per O'Neal.
On January 31, 2010, Van Gundy was named the coach of the Eastern Conference All-Star team for the 2010 NBA All-Star Game, making it the second time he had been given the honor to coach an all-star team. He led the Eastern Conference to victory for the second time.
On May 21, 2012, Van Gundy was relieved of his duties as Head Coach, despite making the playoffs in all five seasons as coach. Prior to the firing, Van Gundy had stated that he had knowledge that Dwight Howard wanted him fired. Van Gundy stated that somebody from management had told him, and the team did not want to risk angering Howard, who was able to opt out of his contract the following season. Howard still requested, and was granted, a trade to the Lakers in August 2012.
On May 14, 2014, Van Gundy was hired as the new head coach and president of basketball operations of the Detroit Pistons, replacing interim head coach John Loyer. On February 9, 2015, Van Gundy became the 43rd coach in NBA history to win 400 games when the Pistons defeated the Atlanta Hawks 105–95. He clinched a playoff berth in the 2016 playoffs.
Van Gundy was born in Indio, California. He grew up as a son of a basketball coach, Bill Van Gundy, the former head coach at Brockport State University in Western New York. His younger brother Jeff Van Gundy has coached two teams in the NBA as well. After Jeff became a member of the NBA on ABC's broadcast team, he was an analyst during the 2009 NBA Finals while Stan coached the Orlando Magic.