Sánchez's first match as Mexico coach was a 2–0 loss to the United States in Phoenix, Arizona in February 2007. Sánchez recorded his first victory against Venezuela, a 3–1 win in front of 67,000 fans in San Diego. Hugo's first game in Mexico took place against Paraguay in Monterrey on 25 March 2007, which Mexico won 2–1. A few days later on 28 March 2007, Mexico defeated Ecuador 4–2 in Oakland, California.
In June 2007 Sánchez coached Mexico in the 2007 edition of the Gold Cup, his first official competition. After struggling in the first stages of the tournament, México reached the final 24 June 2007 and lost 2–1 against the US.
On 27 June 2007, in the opening game of the 2007 Copa América held in Venezuela, Sánchez led the Mexico national team to a stunning 2–0 win Brazil, Hugo's first major victory as a coach. After easing through the group stage of the tournament, Hugo led the team to the semi-finals (beating Paraguay 6–0 in the quarter-finals) where they were beaten 3–0 by Argentina. Mexico ended the tournament in third place by defeating Uruguay 3–1.
In August 2007, Sánchez announced that Mexico would permanently, or at least in his time coaching the team, drop their famous green home kit, replacing it with their white away kit, meaning that their new away kit would be red. For this decision, Sánchez was subject of a lot of criticism. The two main arguments against him were that the decision was breaking a long-standing Mexican tradition, yet the strongest critics suggested that he should devote more time to the strategy and training of the Mexico team rather than entertaining himself with superfluous features of the sport.
On 1 September 2007, Sánchez inaugurated a street with his name in Puebla, central Mexico, before a thousand of the locals around there.