On December 6, 1999, Williams was named as the head coach of the Michigan State Spartans football team. Williams coached the Spartans to a 37–34 win over Florida in the 2000 Citrus Bowl in his first game as head coach. In his first full season as head coach, the Spartans began their 2000 season 3–0, with wins over Marshall, Missouri, and Notre Dame, before losing four consecutive and finishing the season 5–6. The Spartans did improve in the following season, though were inconsistent, and finished the regular season 6–5, which included a win versus rival Michigan in the infamous "Clockgate" game. In the 2001 Silicon Valley Football Classic, Michigan State defeated Fresno State 44–35, finishing the season 7–5 and giving Williams his second bowl victory. With the victory, he became the first coach in Spartans history to win his first two bowl games. Nearing the end of his third season, Michigan State was 3–6 and last place in the Big Ten when the Spartans decided to fire Williams as head coach.