The Houston Astros hired Virdon as their manager on August 20, 1975, succeeding Preston Gómez. Tal Smith, who had served as executive vice president for the Yankees, had become the Astros' general manager on August 7. Virdon led the Astros to third-place finishes in 1976 and 1977, but the Astros slipped to fifth place in 1978. The 1979 Astros fell one game short of winning the NL West division championship. The Astros tied the Los Angeles Dodgers for the division championship in 1980, and defeated them in the 1980 NL West tie-breaker game. The Astros played the Philadelphia Phillies in the 1980 NLCS, losing the series in five games. He again won the Manager of the Year Award in 1980. Due to the 1981 Major League Baseball strike, the 1981 season was split into halves with each half's winner appearing in the 1981 NL Division Series. The Dodgers won the first half, while the Astros won the second. In the Division Series, the Dodgers defeated the Astros in five games. During the 1982 season, the Astros fell to fifth place. Virdon was fired during the season and replaced by Bob Lillis.