Lee became a VJ for MuchMusic in 1995, hosting MuchMusic’s alternative music show The Wedge.

In 1995, on the day that sexual orientation was held to be protected under section 15 of the Canadian Charter of Rights and Freedoms by the Supreme Court of Canada in the Egan v Canada case, Lee celebrated the decision by kissing a woman on the air. She later appeared on the cover of Xtra! in 1997.

In the mid-1980s, she became the lead singer for Bob’s Your Uncle, a Vancouver alternative rock band. Lee often incorporated performance art techniques into the band’s melodic rock. When that band broke up, Lee pursued a solo music career, releasing several solo albums and performing as an actor in theatre, film and television projects. She was the lead singer for the band Slan. Neko Case covered Lee’s song “Knock Loud” on her 2001 EP Canadian Amp.

During her last appearance as a MuchMusic VJ in 2001, Lee and her co-host turned their backs to the camera, and mooned the audience on live television.

She became the new host of CBC Radio One’s Saturday afternoon pop culture magazine radio-show Definitely Not the Opera in 2002. Definitely Not the Opera completed its run in 2016.

In 2003, she became the centre of controversy when Mitchell first announced that he was casting Lee in his film Shortbus (released 2006). Due to Mitchell’s announcement that the film was to be sexually explicit in nature – Lee and other cast members perform non-simulated intercourse and masturbation on screen – the CBC initially threatened to fire her. In making Shortbus Mitchell sought to make a film about love and sex without censoring itself. Celebrities such as director Francis Ford Coppola, R.E.M.’s Michael Stipe, actress Julianne Moore and artist and musician Yoko Ono, as well as the CBC’s listening audience, rallied behind her, and the CBC ultimately relented. The movie premiered at the 2006 Cannes Film Festival. Her performance in Shortbus earned Lee the 2007 International Cinephile Society Award for Best Supporting Actress. This was not her first film that explores a sexually explicit nature. She acted in 3 Needles (2005), a short film about HIV and Aids. The film takes place in various locations around the world – Canada, China, and South Africa – demonstrating the universality of STDs/STIs.

Her feature film directorial debut Year of the Carnivore premiered at the Toronto International Film Festival in 2009. Lee, Litovitz and Buck 65 also collaborated on the film’s soundtrack, which garnered a Genie Award nomination for Best Original Score at the 31st Genie Awards.

In 2012 she was chosen to play Olivia Chow in the biopic television film Jack, alongside Rick Roberts as Jack Layton. The film aired on CBC Television in 2013. She subsequently won the 2014 Canadian Screen Award for Best Performance by a Lead Dramatic Actress in a Program/Mini-Series.

In 2013, Lee wrote and starred in a theatrical performance show How Can I Forget? at Toronto’s Rhubarb and Summerworks theatre festivals. She and Litovitz also staged Morrice Fled: Two Paintings Talk to Each Other, a pop-up performance at the Art Gallery of Ontario based on the art of James Wilson Morrice, in January. In 2014, Lee choreographed a dance solo for Syreeta Hector as part of On Display for Toronto Dance Theatre. From 2015-2017, she created and directed Sphere of Banished Suffering with dancers Jenn Goodwin, Mairi Greig, and Charlie McGettigan with Litovitz developed in residencies with LUFF art+dialogue, Dancemakers, Artscape Sandbox, and premiered at the Festival of New Dance 2017.

She was in a relationship with writer and musician Adam Litovitz, who was also her frequent artistic collaborator, from 2007 until 2018. They occasionally performed improvised musical sets under the name LLVK, short for Lee/Litovitz/Valdivia/Kamino, and formed the band Jooj, which released its debut album in 2015.

In 2016, Lee hosted the 10 episode summer series Sleepover for CBC Radio, which continued as a podcast until 2018.

Her second feature film as a director, Octavio Is Dead!, premiered at the Inside Out Film and Video Festival in 2018, and received several Canadian Screen Award nominations at the 7th Canadian Screen Awards.

In 2019, she wrote and appeared in Unsafe, a documentary theatre production on the topic of censorship, at Canadian Stage.

In 2020, Lee hosted the Canadian adaptation of Landscape Artist of the Year for Makeful.