Following the dismissal of Toni Oliveira, president Francisco Escobar appointed the former Sevilla player as the new first team coach. During his tenure at the helm, Sevilla managed to eliminate Greek side Olympiakos in the second round of the UEFA Cup, before losing to FC Barcelona. In the league championship, after a hesitant start and a subsequent reaction from the team, a series of poor results led to his dismissal at the beginning of 1996.
Juan Carlos Álvarez would return to manage Sevilla on two more occasions during the last five years of the 20th century. During the 1997/98 season, in a final attempt to achieve promotion to the First Division, Álvarez replaced Vicente Miera, who in turn had already taken over from Julián Rubio. However, Sevilla FC would finish the championship in seventh place, far from the places that gave them the right to the great objective of promotion. Just a couple of years later, during the 1999/00 season, with Sevilla in the First Division, Juan Carlos Álvarez was once again asked by the club's board of directors to take charge of the first team, which was in the bottom half of the table. During this third and final period as first team coach, despite the efforts of the Asturian, Sevilla would remain at the bottom of the table until the end of the season, thus certifying their relegation to the Second Division.