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In 2002, Bischoff was hired by World Wrestling Entertainment (WWE, formerly WWF) to be the General Manager of Raw. Bischoff's wrestling innovations in WWE included the "Raw Roulette" and the Elimination Chamber, as well as feuds with Stone Cold Steve Austin, John Cena, SmackDown General Manager Stephanie McMahon, and Paul Heyman. At Taboo Tuesday 2004 Bischoff would have his head shaved after failing to beat his "kayfabe" Nephew Eugene. Bischoff then began a face turn after his head got shaved. He favoured face wrestlers such as Randy Orton, Chris Benoit and Chris Jericho. Bischoff "kayfabe" took a vacation after allowing Randy Orton's team to become General Managers for up to four weeks with every member being the General Manager once a week.

Bischoff would turn heel again after then-WWE Champion John Cena, drafted to RAW in June 2005, refused to participate in Bischoff's vendetta against an impending ECW uprising. As a result, Bischoff "declared war" on Cena (citing disdain for Cena's rapping and "thug nature") and made wrestlers such as Chris Jericho and Christian try to take away the WWE Championship from Cena. In November Bischoff aligned himself with Kurt Angle. After numerous title shots, Cena maintained to have Angle's number. At Survivor Series 2005, Bischoff lost to Smackdown GM Theodore Long in a match which was GM vs. GM; following several months of Raw and SmackDown! Invasions, Bischoff would lose to Long after The Boogeyman helped Long beat Bischoff.

On the December 5 edition of Raw, Eric Bischoff was kayfabe "fired" as General Manager, when Vince McMahon tossed him into a garbage truck - following a "trial" where his history of unscrupulous actions were listed - and had him driven out of the arena. Bischoff then sat out the remainder of the year.

On September 25, 2006, Bischoff appeared on WWE TV for the first time in close to a year, being brought into the ring by Jonathan Coachman.

Bischoff was chosen as the special guest referee for the D-Generation X vs. Rated-RKO match at Cyber Sunday on November 5, with 60% of the vote. He then cheated DX out of the win, leaving Orton and Edge the victors. The next night on Raw, Bischoff was reinstated as General Manager for one night only. During his time as the GM on Raw, he restarted matches if he did not like the outcome. He also got revenge on Maria for her statement made in his trial the year before by making her face Umaga, forced John Cena to "take the night off," and banned DX from the building. He restarted the match between Jeff Hardy and Johnny Nitro for the WWE Intercontinental Championship after Hardy won by DQ. Bischoff restarted that match as a No Disqualification match, and Nitro took advantage of that using Melina to distract Hardy and striking him with the title belt. At the end of the show, DX interfered in the main event when Bischoff tried to help Edge and Randy Orton win the tag team title, and forced him to be humiliated by "Big Dick Johnson" as revenge for costing them their match the night before.

On March 5, 2007, Bischoff made a brief appearance on Raw in Phoenix, Arizona to give Vince McMahon his thoughts on the WrestleMania 23 match against Donald Trump. Then on December 10, 2007, Bischoff made his last appearance with WWE on Raw for its 15th Anniversary Special and was confronted by Chris Jericho, the man whom he fired on Raw in August 22, 2005.

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