As a struggler in Bollywood, initially Shakti Kapoor did many inconsequential roles in movies, all the while looking out for a suitable role as a leading man. The years 1980–81 established Shakti Kapoor as an actor in Bollywood with two of his movies Qurbani and Rocky. In 1983, Kapoor had roles in Himmatwala and the Subhash Ghai directed movie Hero. Kapoor had played villain roles in both these movies. In the nineties, he often Diversified to positive comic roles and performed them with equal finesse. He has been nominated for the Filmfare Award in the Best Comedian category and won once, for his performance as Nandu in David Dhawan's film, Raja Babu. Some of his comic roles have been as Inspector Bhinde in Insaaf, Prasad in Baap Numbri Beta Dus Numbri, Crime Master Gogo in Andaz Apna Apna, Tohfa, as Batuknath in ChaalBaaz and as Goonga in Bol Radha Bol.

Kapoor has been a reference for mimicry artistes who emulate his style and dialogues such as "Aaaooo Lolita" from the movie Tohfa, "Main Nanha sa Chotta sa Bachcha Hoon" from the movie Chaalbaaz and "Nandu sabka bandhu, samajhta nahi hai yaar" from the movie Raja Babu. Since 2000, Kapoor is a regular fixture in Priyadarshan films like Hungama, Hulchul, Chup Chup Ke, Malamaal Weekly and the Malayalam remake Bhagam Bhag. He also acted in a few Bengali films of Kolkata, Odia film and in an Assamese feature film. In 2011, he was in the reality television show Bigg Boss 5 as one of the contestants. He has appeared in the musical comedy Aasman Se Gire Khajoor Pe Atke with his sister-in-law Padmini Kolhapure. He is also the brand ambassador of Servokon.

In March 2005, India TV released a video, allegedly showing Shakti Kapoor asking for sexual favour from an undercover reporter posing as an aspiring Actress, in return for entry into the film industry. Where he told the undercover reporter "I want to make love to you....kiss you" According to India TV, this was a sting operation to expose the phenomenon of casting couch prevalent in Bollywood. This incident sparked a controversy in Bollywood and Kapoor was banned by the Film & Television Producers Guild of India. Association of Indian Motion Pictures and TV Programme Producers decided not to ban him as no allegations against him were proved. One week later, however, the Film & Television Producers Guild lifted the ban.