Forsberg began coaching Modo Hockey of the Elitserien in 1992–93, leading them to a 17-17-6 record. After a sub-.500 season in 1993–94, his coaching tenure ended. During his two seasons with Modo, he coached his son Peter Forsberg who was starring for the club. He took over as head coach of the Swedish national team in 1995 after Curt Lundmark. After the World Championships in 1998, he resigned. Forsberg then briefly served as a mid-season replacement as head coach of the Eisbären Berlin of the Deutsche Eishockey Liga.