Mills, who played as a right-back and as a midfielder, started his career with First Division club Nottingham Forest. He became the club's youngest league player after making his first-team debut at the age of 16 in 1978. He played in the victorious 1980 European Cup Final, which made him the youngest finalist in European Cup history. He joined the Seattle Sounders of the North American Soccer League in 1982 and played for them for one season, which culminated in a loss to the New York Cosmos in Soccer Bowl '82. While with them Mills had a loan at Derby County, making 23 appearances for the Second Division club. He returned to Forest in 1983, and made 168 appearances over two spells at the club. He left for their rivals, Notts County of the Third Division, in 1987. Mills then joined Leicester City in 1989, and after two unsuccessful forays into the First Division play-offs he helped them win promotion to the Premier League in 1994. He soon returned to County, by this time playing in the First Division, after 232 appearances for Leicester. Here Mills earned the last honour of his playing career, winning the Anglo-Italian Cup in 1995. He retired from professional football in 1996 due to an injury, having made 159 appearances for County over two spells.