Iñárritu began his career in 1984 as a radio host at the Mexican radio station WFM, the country's most popular rock music station, where he "pieced together playlists into a loose narrative arc". During his time in radio he also wrote and broadcast small audio stories and storytelling promos, that would become a reference for generations of audio producers, radio Dj's and broadcasters as to how to use radio as a more creative media outlet. He later became the youngest Producer for Televisa, the largest mass media company in Latin America. From 1987 to 1989, he composed music for six Mexican feature films. During this time, Iñárritu became acquainted with Mexican Writer Guillermo Arriaga, beginning their screenwriting collaborations. Iñárritu has stated that he believes music has had a bigger influence on him as an Artist than film itself.

In the early 1990s, Iñárritu created Z films, a production company, with Raul Olvera in Mexico. Under Z Films, he started writing, producing and directing short films and advertisements. Making the final transition into TV and film directing, he studied under well-known theater Director Ludwik Margules, as well as Judith Weston in Los Angeles. In 1995, Iñárritu wrote and directed his first TV pilot for Z Films, called Detrás del dinero, or Behind the Money, starring Miguel Bosé. Z Films went on to be one of the biggest and strongest film production companies in Mexico, launching seven young Directors in the feature film arena.

In 2000, Iñárritu directed his first feature film Amores perros, co-written with Guillermo Arriaga. Amores perros explored Mexican society in Mexico City told via three intertwining stories. In 2000, Amores perros premiered at the Cannes Film Festival and won the Critics' Week Grand Prize. It was the film debut of actor Gael García Bernal, who would later appear in Babel and the Iñárritu-produced Mexican film Rudo y Cursi. Amores perros was nominated for the Academy Award for Best Foreign Language Film.

From 2001 to 2011, Iñárritu directed several short films. In 2001, he directed an 11-minute film segment for 11'09"01 September 11 - which is composed of several short films that explore the effects of the 9/11 terrorist attacks from different points of view around the world. In 2007, he made ANNA, part of French anthology film Chacun son cinéma, which screened at the 2007 Cannes Film Festival. Chacun son cinéma, a collection of 34 short films by 34 renowned film Directors representing 25 countries, was produced for the 60th anniversary of the film festival. In 2012, Iñárritu made the experimental short film Naran Ja: One Act Orange Dance, inspired by L.A Dance Project's premiere performance, featuring excerpts from the new choreography Benjamin Millepied crafted for Moving Parts. The story takes place in a secluded, dusty space and centers around LADP Dancer Julia Eichten.

In 2002, Iñárritu directed "Powder Keg", an episode for the BMW short film series The Hire, starring Clive Owen as the driver and Stellan Skarsgård as a war Photographer. It won the Cannes Gold Lion Advertising Award. In 2010, Iñárritu directed "Write the Future", a football-themed commercial for Nike ahead of the 2010 FIFA World Cup, which went on to win the Grand Prix at the Cannes Lions Advertising Festival. In 2012, he directed Procter & Gamble's "Best Job" commercial spot for the 2012 Olympic Ceremonies. It won the Best Primetime Commercial Emmy at Creative Arts Emmy Awards and the DGA Award for Outstanding Directorial Achievement in Commercials.

After the success of Amores Perros, Iñárritu and Arriaga revisited the intersected-stories structure of Amores perros in Iñárritu's second feature film, 21 Grams (2003). The film starred Benicio del Toro, Naomi Watts and Sean Penn. It was selected to compete for the Golden Lion at the Venice Film Festival, where Penn received the Volpi Cup for Best Actor. At the 76th Academy Awards, Del Toro and Watts received nominations for their performances.

In 2006, Iñárritu was honored at the Gotham Awards' World Cinema Tribute, alongside fellow Mexican filmmakers Alfonso Cuarón and Guillermo del Toro. In 2015, Iñárritu received the Sundance Institute's Vanguard Leadership Award for the "originality and independent spirit" of his films. He was also honored by the Los Angeles County Museum of Art at its Art + Film Gala.

In 2010, Iñárritu directed and produced Biutiful, starring Javier Bardem, written by Iñárritu, Armando Bó Jr., and Nicolás Giacobone. The film premiered at the Cannes Film Festival in May 2010. Bardem went on to win Best Actor (shared with Elio Germano for La nostra vita) at Cannes. Biutiful is Iñárritu’s first film in his native Spanish since his debut feature Amores perros. The film was nominated at the 2011 Golden Globes for Best Foreign Language Film, and at the BAFTA Awards for Best Film Not in the English Language and Best Actor. For the second time in his career, Iñárritu's film was nominated for Best Foreign Language Film at the Academy Awards; Javier Bardem’s performance was also nominated for the Academy Award for Best Actor.

On October 4, 2012, Facebook released an Iñárritu-directed brand film titled The Things That Connect Us to celebrate the social network reaching one billion users.

Iñárritu's next film as a Director was The Revenant, which he and Mark L. Smith adapted from Michael Punke's novel of the same name. The film starred Leonardo DiCaprio, Tom Hardy, Domhnall Gleeson, and Will Poulter. It is a "gritty" 19th-century period drama-thriller about fur trapper Hugh Glass, a real person who joined the Rocky Mountain Fur Company on a "journey into the wild" and was robbed and abandoned after being mauled by a grizzly bear. The film considers the nature and stresses on relationships under the duress of the wilderness, and issues of revenge and pardon via Glass's pursuit of the man who was responsible for his hardship. The Revenant took nine months to shoot. The film received "generally favorable" reviews, and was nominated for 12 Academy Awards, including Best Picture and Best Director, winning Best Director, Best Cinematography and Best Actor. It was also nominated for four Golden Globe Awards, winning three, including Best Motion Picture – Drama and Best Director, and received nine Critics' Choice Movie Awards nominations, including Best Picture and Best Director.

In 2014, Iñárritu directed, co-produced and co-wrote his first comedy, Birdman or (The Unexpected Virtue of Ignorance), starring Michael Keaton, Edward Norton, Emma Stone, Naomi Watts, Zach Galifianakis, and Andrea Riseborough. Birdman is about a washed-up actor famed for playing an iconic superhero who tries to revive his career by doing a play based on the Raymond Carver short story "What We Talk About When We Talk About Love." The film and Iñárritu won the Golden Globe Award for Best Screenplay, and the Academy Award for Best Picture, Best Directing, and Best Original Screenplay.

Iñárritu has been recognized with multiple awards for his films, including four Academy Awards, two Directors Guild of America Awards, a Producers Guild of America Award, three British Academy Film Awards, three AACTA Awards, three Golden Globe Awards, two Independent Spirit Awards, two American Film Institute Awards, and three Cannes Film Festival Award. He is the first Mexican Director to be nominated for the Academy Award for Best Director and the Directors Guild of America Award for Outstanding Directing, and the first to win the Best Director Award at the Cannes Film Festival. In 2015, Iñárritu won, among many other accolades, the Directors Guild Award for Outstanding Directing, the Producers Guild of America Award for Best Theatrical Motion Picture, and the Academy Award for Best Picture, Best Original Screenplay and Best Directing for Birdman, becoming the first Mexican to win three Academy awards. In 2016, Iñárritu won the Academy Award for Best Director for his work on The Revenant, marking the first time in 65 years that a Director has won the award in two consecutive years. Iñárritu is the third Director to accomplish this feat, following John Ford and Joseph L. Mankiewicz.

Iñárritu's virtual reality project Carne y Arena was first presented at the 2017 Cannes Film Festival and later featured at the Prada Foundation in Milan.

As of 2018, each of Iñárritu's feature films, with the exception of Amores perros, showcases at least one Academy Award nominated performance.