Vélez began her career in Mexican revues in the early 1920s. She initially performed under her paternal surname (see Hispanic American naming customs) of Villalobos, but after her father returned home from the war (he did not die in combat as some sources state), he was outraged that his daughter had decided to become a stage performer. She chose her maternal surname Vélez as her stage name. Their mother introduced Vélez and her sister Josefina to the popular Spanish Mexican vedette María Conesa, “La Gatita Blanca”. Vélez debuted in a show led by Conesa, where she sang “Oh Charley, My Boy” and danced the shimmy. In 1924, Aurelio Campos, a young pianist and friend of the Vélez sisters, recommended Vélez to stage producers Carlos Ortega and Manuel Castro. Ortega and Castro were preparing a season revue at the Regis Theatre, and hired Vélez to join the company in March 1925. Later that year, Vélez starred in the revues Mexican Rataplan and ¡No lo tapes! (both parodies of the Bataclan’s shows in Paris). Her suggestive singing and provocative dancing was a hit with audiences, and she soon established herself as one of the main stars of vaudeville in Mexico. After a year and a half, Vélez left the revue after the manager refused to give her a raise. She then joined the Teatro Principal, but was fired after three months due to her “feisty attitude”. Vélez was quickly hired by the Teatro Lirico, where her salary rose to 100 pesos a day.

In 1926, Frank A. Woodyard, an American who had seen Vélez perform, recommended her to stage director Richard Bennett (the father of actresses Joan and Constance Bennett). Bennett was looking for an actress to portray a Mexican cantina singer in his upcoming play The Dove. He sent Vélez a telegram inviting her to Los Angeles to appear in the play. Vélez had been planning to go to Cuba to perform, but quickly changed her plans and traveled to Los Angeles. However, upon arrival, she discovered that she had been replaced by another actress.

After her debut in the short film Sailors, Beware!, Vélez appeared in the Hal Roach short, What Women Did for Me, opposite Charley Chase. Later that year, she did a screen test for the upcoming Douglas Fairbanks full length film The Gaucho. Fairbanks was impressed by Vélez and he quickly signed her to a contract. Upon its release in 1927, The Gaucho was a hit and critics were duly impressed with Vélez’s ability to hold her own alongside Fairbanks, who was well known for his spirited acting and impressive stunts.

Vélez made her second major film, Stand and Deliver (1928), directed by Cecil B. DeMille. That same year, she was named one of the WAMPAS Baby Stars. In 1929, Vélez appeared in Lady of the Pavements, directed by D. W. Griffith and Where East Is East, playing a young Chinese woman. In the western film Wolf Song directed by Victor Fleming, she appears alongside Gary Cooper. As she was regularly cast as “exotic” or “ethnic” women that were volatile and hot tempered, gossip columnists took to referring to Vélez as “Mexican Hurricane”, “The Mexican Wildcat”, “The Mexican Madcap”, “Whoopee Lupe” and “The Hot Tamale”.

By 1929, the film industry was transitioning from silents to sound films. Several stars of the era saw their careers abruptly end due to heavy accents or voices that recorded poorly. Studio executives predicted that Vélez’s accent would likely hamper her ability to make the transition. That idea was dispelled after she appeared in her first all-talking picture in 1929, the Rin Tin Tin vehicle, Tiger Rose. The film was a hit and Vélez’s sound career was established.

Vélez often targeted fellow actresses whom she deemed as rivals, professionally or otherwise, a habit which began back in her vaudeville days and continued in films. Vélez’s image was that of a wild, highly sexualized woman who spoke her mind and was not considered a “lady”, while fellow Mexican actress Dolores del Río projected herself as sensual, but classy and restrained, often hailing from aristocratic roots. Vélez hated del Río, and called her “bird of bad omen”. Del Río was terrified to meet her in public places. When this happened, Vélez was scathing and aggressive. Vélez openly mimicked del Río, ironically making fun of her elegance. Vélez also disliked Marlene Dietrich whom she suspected of having an affair with Gary Cooper while filming Morocco in 1930. Her rivalries with Jetta Goudal, Lilyan Tashman and Libby Holman were also well documented. In retaliation, Vélez would perform scathing impersonations of the women she disliked at Hollywood parties. Also notable are her imitations of figures such as Greta Garbo, Marlene Dietrich, Fanny Brice, Gloria Swanson, Katharine Hepburn, Simone Simon, and Shirley Temple.

With the arrival of talkies, Vélez appeared in a series of Pre-Code films like Hell Harbor (directed by Henry King), The Storm (1930, directed by William Wyler), and the crime drama East Is West opposite Edward G. Robinson (1930). In 1931, she appeared in her second film for Cecil B. DeMille, Squaw Man, opposite Warner Baxter, and in Resurrection, directed by Edwin Carewe. In 1932, Vélez filmed The Cuban Love Song (1931), with the popular singer Lawrence Tibbett. That same year, she had a supporting role in Kongo (a sound remake of West of Zanzibar), with Walter Huston. She also starred in Spanish-language versions of some of her movies produced by the Universal Studios like Resurrección (1931, the Spanish version of Resurrection), and Hombres en mi vida (1932, the Spanish version of Men in Her Life). Vélez soon found her niche in comedy, playing beautiful, but volatile, characters.

After her breakup with Cooper, Vélez began a short-lived relationship with actor John Gilbert. They began dating in late 1931, while Gilbert was separated from his third wife Ina Claire. Rumors of an engagement were fueled by the couple, but Gilbert ended the relationship in early 1932, and attempted to reconcile with Claire.

In February 1932, Vélez took a break from her film career and traveled to New York City where she was signed by Broadway impresario Florenz Ziegfeld, Jr. to take over the role of “Conchita” in the musical revue Hot-Cha!. The show also starred Bert Lahr, Eleanor Powell and Buddy Rogers.

In 1933, Vélez appeared in the films The Half-Naked Truth with Lee Tracy and Hot Pepper, with Victor McLaglen and Edmund Lowe. Later that year, she returned to Broadway where she starred opposite Jimmy Durante in the musical revue Strike Me Pink. In 1934, she filmed Palooka and Strictly Dynamite (both also with Durante). That same year, Vélez was cast as “Slim Girl” in Laughing Boy with Ramón Novarro. The film was quietly released and largely ignored. The few reviews it received panned the film, but praised Vélez’s performance. She had more success with her brief appearance in the star packed film Hollywood Party, where she has a magnificent comic routine with Laurel and Hardy. Although Vélez was a popular actress, RKO Pictures did not renew her contract in 1934. Over the next few years, Vélez worked for various studios as a freelance actress; she also spent two years in England where she filmed The Morals of Marcus and Gypsy Melody (both 1936). She returned to Los Angeles the following year where she appeared in the final part of the Wheeler & Woolsey comedy High Flyers (1937).

Shortly thereafter, Vélez met Tarzan actor Johnny Weissmuller while the two were in New York. They dated off and on when they returned to Los Angeles, while Vélez also dated actor Errol Flynn. On October 8, 1933, Vélez and Weissmuller were married in Las Vegas. There were reports of domestic violence and public fights. In July 1934, after ten months of marriage, Vélez filed for divorce citing “cruelty”. She withdrew the petition a week later after reconciling with Weissmuller. On January 3, 1935, she filed for divorce a second time and was granted an interlocutory decree. That decree was dismissed when the couple reconciled a month later. In August 1938, Vélez filed for divorce for a third time, again charging Weissmuller with cruelty. Their divorce was finalized in August 1939.

Vélez last Broadway performance was in the 1938 musical You Never Know, by Cole Porter. The show received poor reviews from critics, but received a large amount of publicity due to the feud between Vélez and fellow cast member Libby Holman. Holman was also irritated by the attention Vélez garnered from the show with her impressions of several actresses including Gloria Swanson, Katharine Hepburn and Shirley Temple. The feud came to a head during a performance in New Haven, Connecticut after Vélez punched Holman in between curtain calls and gave her a black eye. The feud effectively ended the show.

Upon her return to Mexico City in 1938 to star in her first Mexican film, Vélez was greeted by ten thousand fans. The film La Zandunga directed by Fernando de Fuentes, co-starring Mexican actor Arturo de Córdova, was a critical and financial success and Vélez was slated to appear in four more Mexican films. She instead returned to Los Angeles and went back to work for RKO Pictures.

In 1939, Vélez was cast opposite Leon Errol and Donald Woods in a B-comedy, The Girl from Mexico. Despite being a B film, it was a hit with audiences and RKO re-teamed her with Errol and Wood for a sequel, Mexican Spitfire. That film was also a success and led to a series of Spitfire films (eight in all). In the series, Vélez portrays “Carmelita Lindsay”, a temperamental yet friendly Mexican singer married to Dennis “Denny” Lindsay (Woods), an elegant American gentleman. The Spitfire films rejuvenated Vélez’s career. Moreover, they were films in which a Latina headlined for eight movies straight –a true rarity.

After the divorce became final, Vélez began dating polo player Guinn “Big Boy” Williams in late 1940. The couple were engaged, but never married. In late 1941, she became involved with author Erich Maria Remarque. Actress Luise Rainer recalled that Remarque told her “with the greatest of glee” that he found Vélez’s volatility wonderful when he recounted to her an occasion where Vélez became so angry with him that she took her shoe off and hit him with it. After dating Remarque, Vélez was linked to boxers Jack Johnson and Jack Dempsey.

In addition to the Spitfire series, she was cast in another musical and comedy features for RKO, Universal Pictures, and Columbia Pictures. Some of these films were Six Lessons from Madame La Zonga (1941), Playmates (1941), opposite John Barrymore, and Redhead from Manhattan (1943). In 1943, the final film in the Spitfire series, Mexican Spitfire’s Blessed Event, was released. By that time, the novelty of the series had begun to wane.

Vélez co-starred with Eddie Albert in a 1943 romantic comedy, Ladies’ Day, about an actress and a baseball player. In 1944, Vélez returned to Mexico to star in an adaptation of Émile Zola’s novel Nana, which was well-received. It would be her final film. After filming wrapped, Vélez returned to Los Angeles and began preparing for another stage role in New York.

In 1943, Vélez began an affair with her La Zandunga co-star Arturo de Córdova. De Córdova had recently moved to Los Angeles after signing with Paramount. Despite the fact that de Córdova was married to Mexican actress Enna Arana with whom he had four children, Vélez granted an interview to gossip columnist Louella Parsons in September 1943 and announced that the two were engaged. She told Parsons that she planned to retire after marrying de Córdova to “cook … and keep house”. Vélez ended the engagement in early 1944, after de Córdova’s wife refused to give him a divorce.

Vélez then met and began dating a struggling young Austrian actor named Harald Maresch, whose stage name was Harald Ramond. In September 1944, she discovered she was pregnant with Ramond’s child. She announced their engagement in late November 1944. On December 10, four days before her death, Vélez announced she had ended the engagement and kicked Ramond out of her home.

Vélez’s death was recounted in the 1959 book Hollywood Babylon by Kenneth Anger and has become urban legend. In his telling, Vélez planned to stage a beautiful suicide scene atop her satin bed, but the Seconal did not mix well with the “Mexi-Spice Last Supper” she had eaten earlier that evening. As a result, she became violently ill, stumbled to the bathroom to vomit, slipped on the bathroom floor tile and fell head first into the toilet, where she subsequently drowned. Anger claimed that Vélez’s “chambermaid” Juanita found her the next morning. Despite the fact that his version of events contradicts published reports and the official ruling, his story is often repeated as fact or for comedic effect – it was recounted in the pilot episode of the television comedy series Frasier, and also referenced in an episode of the cartoon The Simpsons. Vélez’s biographer, Michelle Vogel, points out that it would have been “virtually impossible” for Vélez to have “stumbled to the bathroom” or even get off her bed after having consumed such a large amount of Seconal. Seconal, a barbiturate, is noted for being fast acting even in small doses and Vélez’s death was likely instantaneous. Her death certificate lists “Seconal poisoning” due to “ingestion of Seconal” as the cause of death, not drowning. Further, there was also no evidence to suggest Vélez had vomited.

In the 2002 book Tarzan, My Father Johnny Weissmuller Jr recounted the events surrounding Vélez’s death as a mystery caused by an attempt to “put a lid” on what happened. It states her housekeeper discovered her body and called Bo Roos, Vélez’s business manager, who called his friend and Beverly Hills Police Chief Anderson to the scene. The book states after Vélez arranged to meet Raymond, decorated her room and dressed in a negligee, her ingestion of Seconal was either to calm her nerves to meet him or a failed dramatic gesture to scare him. The book also suggested the baby was fathered possibly by Cooper not Raymond.

Lupe Vélez has a sculpture in her honor located in San Luis Potosí, Mexico. The sculpture was done by artist Emilio Borjas in 2017 and is located in the Garden of San Sebastian, the neighborhood where the actress was born.