Lily played leading roles in a number of productions in Brisbane's La Boite Repertory Theatre before travelling to England and Europe.

Lily then went on to study with Philippe Gaulier, Monika Pagneaux, Carlo Bosso of the Commedia dell'arte, and Master Yeung Kim Wah of the Cantonese Opera.

With co-performer Philip Pellew, she toured as Peta Lily and Co. with shows Low Fidelity and Beg!, and collaborated with David Glass to create Whale, based on Melville's Moby Dick.

In 1999, Lily returned to solo work with the autobiographical Topless, followed by Midriff (2002), Invocation (2010), and Chastity Belt (2012), an examination of the relationship between sexuality and autonomy for women.

Lily was mentored by April de Angelis and wrote the full-length play Blame (1994), which was short-listed for the Verity Bargate Award.