Lilly made his MLB debut for the Expos on May 14, 1999 against the Pittsburgh Pirates, pitching one inning in relief. He made his first MLB start on September 19 against the Atlanta Braves. He pitched in nine games for the Expos, with three starts.

Lilly was traded to the New York Yankees on March 17, 2000, along with Christian Parker, as a player to be named later in the 1999 trade that also sent Jake Westbrook to the Yankees in exchange for Hideki Irabu.

Lilly played for more than two years for the Yankees before being dealt to the Oakland Athletics in a three-team deal that included pitchers Jeff Weaver heading to New York and Jeremy Bonderman going to the Detroit Tigers. Lilly was in the starting rotation for Oakland, and pitched in the American League Division Series in both 2002 and 2003.

Lilly was traded from the Athletics to the Toronto Blue Jays for Bobby Kielty. He made the American League All-Star team in 2004 as the Jays’ lone representative that year.

The highlight of his career as a Blue Jay was a start on August 23, 2004 against the Boston Red Sox. He pitched a complete-game shutout and struck out 13 batters in a three-hit 3–0 victory.

Lilly was 15–13 with a 4.31 ERA and 160 strikeouts in 2006, exceeding his previous career-high for wins (12). He also equaled a career high for starts (32) and nearly matched his career highs in strikeouts and innings pitched. This season, he ranked first among the Jays’ pitching staff in strikeouts and second only to Roy Halladay in wins (Halladay had a 16–5 record before a recurring elbow injury ended his season in late September).

On August 21, 2006, in a game against the Oakland Athletics, Lilly was surrendering an early 8-0 lead in the 3rd inning when manager John Gibbons took him out of the game. With the score 8-5 and runners on 1st and 3rd, Lilly refused to give him the ball. Eventually, he reluctantly left the mound and later feuded with Gibbons in the locker room, though Gibbons maintained no punches were thrown.

In his first start for the Cubs, Lilly defeated the Cincinnati Reds in a strong outing, taking a no hitter into the fifth inning, and only yielding one earned run over seven innings. Lilly then was the starting pitcher for the Cubs home opening game at Wrigley Field on April 9, 2007. Lilly gave up three runs in six innings, but did not factor into the decision. Lilly pitched well in April, lasting at least six innings in each of his five starts while never giving up more than three runs in a game posting a 2.18 ERA.

Lilly was prominent in a contentious series in Atlanta between the Cubs and the Atlanta Braves. In game one of the series, Alfonso Soriano hit three home runs in his first three at-bats as part of a Cubs 9-1 victory. In the next game, Tim Hudson hit Soriano with a first-pitch fastball triggering home-plate umpire Tim Tschida to issue warnings to both teams. On the final game of the series, Lilly hit Édgar Rentería in the first inning, and was promptly thrown out of the ballgame by Jim Wolf. Lilly was not suspended for his actions in the game. In 2009, he was named to his second all-star game, as the Cubs lone representative.

Lilly was the starting pitcher in two games for Team USA in the 2009 World Baseball Classic.

On June 13, 2010, Lilly took a no-hitter into the 9th against the Chicago White Sox. In the ninth, he gave up a lead off single to Juan Pierre, then was lifted for relief pitcher Carlos Mármol, who got the save, getting out of a bases loaded jam, for a 1-0 Cub victory. This was the longest outing that Lilly held a team hitless. The no-hitter would have been the first pitched at Wrigley Field since Milt Pappas in 1972.

On July 31, 2010, Lilly and Ryan Theriot were traded to the Los Angeles Dodgers for Blake DeWitt, Brett Wallach, and Kyle Smit. Lilly won his first five starts as a Dodger posting a 1.83 ERA. He finished his season with the Dodgers with a record of 7-4 and a 3.52 ERA in 12 starts, which included a complete game shutout on August 19 against the Colorado Rockies. On October 19, 2010, Lilly agreed to a 3-year, $33 million, contract with the Dodgers. After a disappointing first half of the season in 2011, where he had an ERA of 4.79, Lilly pitched much better in the second half, with a 2.94 mark, also allowing only 9 homers in the second half after allowing 19 the first half. His final record was 12-14 with a 3.97 ERA in 33 starts.

Lilly’s wife, Natasha (Tasha), is a veterinarian. They are active advocates for animal humane societies, and reside in Oakhurst, California. Their son, Theodore Roosevelt Lilly IV, was born on March 14, 2010.

Lilly returned for spring training in 2013 but lost time due to illness and rainouts so he was unable to build up arm strength. He started the season on the disabled list, and made several rehab appearances in the minors. After injuries to starters Zack Greinke and Chris Capuano, Lilly was activated off the disabled list and returned to the rotation on April 24. He made 2 starts and then returned to the DL on May 3 with a strained rib cage muscle. He returned again on May 20 and he made 3 more starts before injuring his neck when he was bumped into by Kyle Blanks of the San Diego Padres in a game on June 4, which led to him returning to the disabled list. After a few more rehab starts, Lilly claimed he was having trouble recovering after starts and that he wanted to work out of the bullpen after his return from the DL. However, the Dodgers instead designated him for assignment on July 25 and released him on August 2.

He had his nerve endings in his neck cauterized after the 2013 season in an attempt to stem the pain that had bothered him throughout the season and joined the Venezuela Winter League to try to show other MLB teams he could still play. However, persistent health problems led him to announce his retirement on November 27, 2013. The Cubs hired Lilly as a special assistant in March 2014.

In January 2015, Lilly was charged with three counts of vehicle insurance fraud. He accepted a plea bargain to pay a $2,500 fine, be on informal probation for two years, and perform 250 hours of community service.

Lilly was eligible to be elected into the Hall of Fame in 2019, but received less than 5% of the vote and became ineligible for the 2020 ballot.