Tilly had small roles in TV shows and movies beginning in 1983. She had a recurring guest role on Hill Street Blues as Gina Srignoli, a mobster's widow who becomes romantically involved with detective Henry Goldblume. Jennifer Tilly also appeared as Garry's girlfriend on It's Garry Shandling's Show, which aired on Showtime in the mid 1980's.

Tilly's breakthrough film role was as a singing waitress in The Fabulous Baker Boys (1989) in a part that was specially written for her by Steve Kloves. That same year, she played a small part in the cult classic horse racing movie, Let it Ride with Richard Dreyfuss and Teri Garr, that Tilly later said "should have done better."

She was nominated for an Academy Award for Best Supporting Actress for her role as a hopelessly bad actress in Woody Allen's Bullets Over Broadway (1994). In 1994, she also had a small role in the The Getaway with Alec Baldwin and Kim Basinger. Tilly was ranked #23 in Celebrity Sleuth "25 Sexiest Women of 199