In 1983, Tilly had small roles and had a recurring guest role on Hill Street Blues as Gina Srignoli, a mobster’s widow who becomes romantically involved with detective Henry Goldblume. She played Frasier Crane’s seductive-but-ditzy date Candi Pearson on an episode of the fourth season of Cheers and appeared as a similar character on the eleventh season of Frasier.

She appeared as Garry’s girlfriend on It’s Garry Shandling’s Show, which aired on Showtime. She was also cast as a high-end prostitute on the short-lived comedy Key West, alongside Fisher Stevens. In 1989, she had a prominent role in the comedy Let It Ride, starring Richard Dreyfuss. Tilly’s breakthrough film role was as a singing waitress in The Fabulous Baker Boys in a role that was written specially for her by Steve Kloves. She was nominated for an Academy Award for Best Supporting Actress for her role as Olive Neal, a hopelessly bad actress in Woody Allen’s Bullets over Broadway but she lost to her co-star Dianne Wiest. In 1994, she also had a small role in The Getaway with Alec Baldwin and Kim Basinger.

In 2001, she starred as Crystal Allen in the Broadway revival of The Women. In 2002 she played Fanny Minafer in the made-for-TV remake of Orson Welles’ The Magnificent Ambersons.

On June 27, 2005, Tilly won a World Series of Poker bracelet (and $158,625) in the Ladies’ No-Limit Texas hold ’em event, beating 600 other players. She followed up this accomplishment on September 1, 2005, by winning the third World Poker Tour Ladies Invitational Tournament held at the Bicycle Casino in Bell Gardens, a suburb of Los Angeles. Tilly has appeared in the GSN Poker Royale series. Tilly played in the Celebrity Poker Showdown which aired June 14, 2006, on Bravo. She came in third place after being beaten by Bravo’s online poker champion Ida Siconolfi. She also participated in the Poker After Dark show.

In a television interview in 2005, Tilly stated that at that point in her career she was more interested in pursuing poker than acting. By December 2008, Tilly announced her retirement from poker as a career. In her monthly column in Bluff Magazine, she said: “I love poker but greatness in poker is an elusive dream. There are too many variants. Trying to find validation in poker is like trying to find a virgin in a whorehouse. I’m not giving up poker entirely – gambling is an addiction after all. I’m just going to treat it more like a hobby and less like a career.”

She had a starring role on the sitcom Out of Practice, which starred Henry Winkler and Stockard Channing. The series was cancelled in May 2006. About this time, Tilly started dividing her time between her film career and professional poker. By the end of 2008, she returned to her film and television career. In 2009, Tilly made her Chinese film debut in the Christina Yao film Empire of Silver playing Mrs. Landdeck.

When playing poker on television, Tilly often wears low-cut tops with push-up bras that expose considerable cleavage in order to “look cute”, but noted that “if people are really playing poker, they don’t care. Nothing looks better to them than a pair of aces. They’re not looking at your pair. They’re looking at their pair.” Tilly appears in the World Series of Poker Tournament of Champions 2007 Edition video game, along with her boyfriend Phil Laak, which was released in 2007 by Activision.

In January 2010, she resumed her poker career. She was nominated for PokerListing’s Spirit of Poker Living Legend Award in 2014, and as of June 2017, her live tournament winnings exceeded $992,000.

In 2012, she returned to Broadway in Don’t Dress for Dinner, garnering an Audience Choice Award nomination for her portrayal of mistress Suzanne. In 2013, she starred in the Wallace Shawn/Andre Gregory collaboration Grasses of a Thousand Colors which premiered at the Royal Court Theatre in London in 2009 and then moved to the Joseph Papp Theater in 2013. She regularly appeared in the comedy revue Celebrity Autobiography.