He started his playing career with Buckfastleigh Rangers as a midfielder and was soon snapped up by Bristol City at the age of 18. He never managed to break into the first team at Ashton gate and was put out on loan at Hereford United quite soon playing 9 games for them in 1974/75. He left Bristol City in January 1977 signing for Torquay United, he was an instant hit and played under Frank O'Farrell where he recieved alot of attention from bigger clubs. After 14 goals in 35 appearances for Torquay he was snapped up by Tottenham Hotspurs in October 1977 for £60,000., he scored four goals in his debut, a 9-0 win over Bristol Rovers. In January 1980 Lee left Spurs, having enjoyed a successful spell scoring 18 goals in 62 games over three years.
Chelsea's £200,000 fee for Lee was worth it with him achieving 185 games and 36 goals in a seven year spell as midfielder and laterly a central defender. In July 1987 he signed for Brentford for £17,500 as a player and helping with youth development. He retired in the 1989 close season after one goal in 24 appearances for Brentford.
Lee started his management career at Watford in 1990 after being youth team coach before that. He was sacked after 6 months in charge afetr a dismal start to the season by November.
Between 1991 and 1998 Lee worked closely with his friend Mark McGhee at a number of clubs including coaching at Reading, Leicester and then Wolves.
Lee worked as a coach at Wolves where the club achieved success reaching the playoffs for Division One and the semi finals of the FA cup. McGhee was sacked in November 1998 and Colin Lee took the hotseat. However after two seasons in charge Lee was sacked in 2000 after a poor start to the season.
Lee was a scout at Leeds over the next two years until he recieved a phone call from Mike Bateson at Torquay requesting his help to support Wes Saunders in keeping Torquay in the league. He came and after a week Saunders was sacked. Colin Lee took over as caretaker manager and saved Torquay.
After spells at Walsall and Millwall, Lee returned to Torquay in 2007. It was to be a turbulent time for the club with at least 3 managers and 3 chairmen over the course of the year. After changing osition three times and being sacked twice, Colin Lee finally became Chief Executive on the 25th May 2007 and appointed Paul Buckle as manager on the 2nd June. Torquay were already down but the plan for re-promotion had already started. Two years later and that dream was completed.