He remained with First Boston until 1988 when he teamed up with associate Bruce Wasserstein to create their own mergers and acquisitions advisory business as Wasserstein Perella & Co.[4] Their company was at the forefront of the 1980s/90s boom in corporate takeovers, and Perella was described by the Financial Times as "famed on Wall Street for transforming mergers and acquisition into a glamorous, moneymaking business in the 1980s".
In 2005, Perella and other top executives resigned from Morgan Stanley in the wake of policy disagreements with Chairman Philip J. Purcell.
In November 2005, Perella and former Morgan Stanley banker Terry Meguid announced that they were opening an investment banking boutique.
In 2003, he and his wife Amy, a survivor of Hodgkin's disease, donated $10 million to the College of Business and Economics to endow the "Perella Department of Finance" and several faculty positions.
In addition, the couple created "The Amy and Joseph Perella Professor of Medicine" at Yale University.