Her first film appearance was in the 1980 short documentary Hearts in Paradise, which showcased "Jo, a new wave singer... compared and contrasted with Teresa, a would-be mothercraft worker... against the background of society’s general resistance and non-comprehension of that which is new and different.

She was cast by director Gillian Armstrong in the lead role of Jackie Mullens despite having no prior acting experience outside of a children's puppet show.

However, she then had to put her singing career on hold for three years because of, according to her, "artistic differences" and "a dud contract" with a record company.

[6] Following a gruelling American publicity tour for Starstruck with frequent interviews, Kennedy also decided she disliked the experience of "non-stop talking about (herself)".

Kennedy was drawn to the role because it was completely different to Starstruck[11] and because she wished to humanise people with a drug addiction.

[12] While her performance was not nominated for a local AFI Award, it did win her Silver Bear for Best Actress at the 35th Berlin International Film Festival.

[18][19] In 1989, she appeared in Tender Hooks with co-star Nique Needles, a social realist film about a turbulent but loving relationship set in the then-grungy Sydney neighbourhood of Kings Cross.

[22] In 1993 she appeared alongside Paul Chubb in "And a Fire Engine to Go With the Dog", an episode of the SBS series Thirty-Minute Theatre.

[citation needed] In 2000, she was nominated for an AFI Award for Best Performance by an Actress in a Telefeature or Mini Series for Waiting at the Royal.