He appeared in numerous motion pictures, including The Godfather Part II (1974), The Front (1976), Once Upon a Time in America (1984), Hide in Plain Sight (1984), The Purple Rose of Cairo (1985), Moonstruck (1987), Harlem Nights (1989), Do the Right Thing (1989), Jacob's Ladder (1990), Hudson Hawk (1991), Ruby (1992), Léon: The Professional (1994), 2 Days in the Valley (1996), Dinner Rush (2000), and Lucky Number Slevin (2006).

Aiello was nominated for an Academy Award for Best Supporting Actor for his role as Salvatore "Sal" Frangione in the Spike Lee film Do the Right Thing (1989).

Aiello had a walk-on role as small-time hood Tony Rosato in The Godfather Part II (1974), ad-libbing the line "Michael Corleone says hello!"

He received considerable acclaim for playing a racist New York City cop in Fort Apache, The Bronx (1981) with Paul Newman.

In 1981, Aiello won a Daytime Emmy Award for Outstanding Performer in Children's Programming for his appearance in an ABC Afterschool Special called A Family of Strangers.

He gained recognition as the befuddled fiancé of Cher opposite her Oscar-winning performance in the romantic comedy Moonstruck (1987), and made a comic appearance in drag for the Robert Altman fashion-industry film Prêt-à-Porter (1994).

Aiello played nightclub owner and Lee Harvey Oswald assassin Jack Ruby in the biopic Ruby (1992), the lead role in Paul Mazursky's film business satire The Pickle (1993), the titular character in the Academy Award-winning short film Lieberman in Love (1995), and a political big shot with mob ties in City Hall (1996), starring Al Pacino.

He appeared in three plays by Louis La Russo II: Lamppost Reunion (his Broadway debut - 1975), Wheelbarrow Closers (1976), and Knockout (1979).

Frank Rich, critic from The New York Times gave the play a mild review, writing "there are a few laughs, a few well-wrought characters, and, in Act II, a beautifully written scene that leads to a moving final curtain".

[24] In the mid-1980s, Aiello starred in a replacement cast version of Hurlyburly (1984) alongside Christine Baranski, Frank Langella, Ron Silver, and Candice Bergen.

He also starred in The House of Blue Leaves (1986) alongside John Mahoney (who earned a Tony Award for his performance), Ben Stiller, Stockard Channing, and Julie Hagerty.

[26] In July 2011, Aiello appeared Off-Broadway in the two-act drama The Shoemaker, written by Susan Charlotte and directed by Antony Marsellis.

[18][33] Many in the entertainment industry voiced their sadness either on Twitter or released statements, such as his Moonstruck co-star Cher, and Robert De Niro, who starred alongside Aiello in four films: Bang the Drum Slowly (1973), The Godfather Part II (1974), Once Upon a Time in America (1984), and Mistress (1992).