In 1870, William Ewart Gladstone was seeking to fill the vacant bishopric of St Asaph. One of his criteria was that the new bishop would be Welsh-speaking. After consulting with Connop Thirlwall, the position was offered to Hughes. Despite being regarded by many as underqualified (most bishops at the time were expected to be Oxbridge graduates), the appointment was soon justified. He was particularly efficient at appointing Welsh-speaking vicars into bilingual churches and thus promoting the church amongst Welsh-monoglots. He was also a staunch supporter of the developing movement for promoting higher education in Wales, initially hoping that his alma mater, St David's College, would become the centre of a Welsh university.
In August 1888 Hughes was struck with paralysis while staying at Crieff in Perthshire. He never recovered and was unable to sign a deed of resignation from the see. He died on 21 January 1889 and was buried at St Asaph Cathedral.