In 1989, Bagley began studying with The Groundlings, and was soon writing and performing with their prestigious Main Stage Company. Although he retired from the theatre's Main Company in the mid 1990s, Bagley still comes back regularly to perform in The Groundlings’ all-improv show Cookin' with Gas. In 1995, Bagley left the Groundlings and turned his attention to television. After guest appearance on Diagnosis: Murder and Seinfeld, he landed his first regular role on the Showtime series Howie Mandel's Sunny Skies.

Since breaking into television in the early 1990s, Bagley has become a familiar face on primetime television. He has guest starred on such shows as Seinfeld, Wings, Dharma & Greg, According to Jim, Curb Your Enthusiasm, The X Files, Suddenly Susan, ER, Ellen, 3rd Rock from the Sun, The Nanny, and Desperate Housewives.

After high school, Tim moved to Southern California to perform with the singing group, The Young Americans. During this time, he also attended California State University Fullerton, where he majored in Art with a Psychology minor. At some point he began taking acting classes with Nina Foch and Howard Fine, and began training and working with The Groundlings. In 1994, Fern Champion and Mark Paladini cast Bagley in his first feature film role as Irv the mechanic in the hit film The Mask.

In addition to his work in independent films, Bagley has appeared in big-budget movies like The Mask, Austin Powers: The Spy Who Shagged Me and Knocked Up. Other high-profile films include Employee of the Month, Happy, Texas and Mistress, starring Robert De Niro. He appeared briefly at the beginning of the 2006 film Accepted.

He also starred with Lisa Kudrow and Victor Garber on Web Therapy, the series of online vignettes developed by Kudrow which was adapted into a half-hour show by Showtime. He can also be seen as Principal Pearson on the 2016 TV Land comedy Teachers.