Valderrama got his start performing in numerous plays, including A Midsummer Night's Dream and Rumors. He made his professional debut in a Spanish-language Pacific Bell commercial. At his drama teacher's suggestion, he got an agent and was immediately cast in the CBS miniseries Four Corners and in Omba Makamba on the Disney Channel. He made his big screen debut starring opposite Freddie Prinze Jr., Brittany Murphy, Matthew Lillard and Jessica Biel in the Warner Brothers film Summer Catch.

Valderrama played Fez on That '70s Show from 1998-2006; he was a junior in high school when the pilot episode was filmed. He also played DJ Keoki in the 2003 film Party Monster alongside Macaulay Culkin, Chloë Sevigny, Wilson Cruz and Seth Green. He has produced and hosted the MTV series Yo Momma since 2006, and appeared (involuntarily) as many as three times on another MTV mainstay, Punk'd, hosted by fellow That '70s alum Ashton Kutcher.