Shetty received praise for playing a woman with AIDS in the drama Phir Milenge (2004), which earned her a nomination for the Filmfare Award for Best Actress.

In addition to her screen work, Shetty is a celebrity endorser for various brands and products, and she has been vocal about personal issues such as feminism, vegetarianism and animal rights.

Shetty next starred alongside Akshay Kumar, Saif Ali Khan, Raageshwari and Shakti Kapoor in the action comedy Main Khiladi Tu Anari.

In the film, Shetty played the dual roles of Mona (a cabaret dancer and a gangster's girlfriend) and her look-alike Basanti (a village belle).

The film, which narrates the love story of a wealthy man and his maid (played by Khan and Shetty respectively), underperformed at the box office.

[18] In 1995, Shetty starred in Hathkadi, where she was working alongside actors such as Saif Ali Khan, Govinda and Madhoo, but they failed at the box office.

In 1998, she had one release, Pardesi Babu, alongside Govinda and Raveena Tandon, for which she received critical acclaim and won the Bollywood Movie Award for Best Supporting Actress for her performance in the film.

In 2000, Shetty received acclaim for her role in the musical romantic drama Dhadkan, which earned reasonable takings at the Indian box office.

[21] In 2004, Shetty appeared in the police drama Garv, in which she portrayed a Muslim orphan and disillusioned table dancer starring opposite Salman Khan.

She received widespread critical acclaim for her performance in Phir Milenge, in which she played a successful city high-flyer who contracts HIV from unprotected sex and becomes a social outcast as a result.

"[23] This marked a break from the previous trend of superficial song-and-dance items in favour of roles that have a greater depth of character,[22] exemplified by her film Dus (2005), an action thriller.

Although it received average returns at the box office,[24] Shetty stated that she had taken the role to reinvent herself by portraying the rather unconventional character of an anti-terrorist squad member.

"[30] During her stay on the show, Shetty instructed fellow housemates Carole Malone and Ken Russell in meditation[31] and flirted with Dirk Benedict[32] but tempers started to fray by Day 7 as a clique formed in the house disapproving of Shilpa's presence.

[33][34] Following a worldwide controversy that publicised her as a target of racist bullying within the house, Shetty won the contest after gaining 63% of the public vote and described the experience as "incredible and overwhelming".

Her first release, Life in a... Metro, received widespread critical acclaim and became the first Bollywood film to premiere at Leicester Square, London.

Shetty starred in the unreleased 2010 Indo-Chinese drama The Desire, a film rescued during production by her mother, who stepped in when its producer abandoned the project unfinished.

Alongside Sajid Khan and Terrence Lewis, Shetty was featured as a talent judge for the dance reality show Nach Baliye (seasons 5, 6 and Shriman v/s Shrimati), from 2012 to 2014.

[39] Since early 2016, she has been judging the dance reality show Super Dancer on Sony Entertainment channel along with co-judges Geeta Kapoor and Anurag Basu.

[43] In February 2006, Shetty lent support to a BBC World Service Trust television show designed to tackle the problem of HIV-AIDS in India.

"These once dignified animals only leave their cages, which are barely larger than the size of their bodies, for a few minutes each day to be forced into the ring to perform tricks which make no sense and are upsetting to them.

[48] In February 2009, Shetty and Raj Kundra became part owners of the Indian Premier League franchise cricket team Rajasthan Royals by paying approximately US$15.4 million for an 11.7% stake.

[54][55] In April 2006, a Madurai court[56] issued non-bailable warrants against Shetty and actress Reema Sen for "posing in an obscene manner" in photographs published by a Tamil newspaper.

Sabharwal confirmed that Shetty had written to him requesting that he enunciate guidelines against frivolous lawsuits against the artists, but he had refused her plea on the grounds that she should have filed a formal petition instead of writing a letter.

[59] During her stay on Celebrity Big Brother 5, Shetty was the target of racism and bullying by some other housemates, chiefly Jade Goody, Jo O'Meara and Danielle Lloyd.

[63] After Shetty had attempted to dispose of the left-over chicken soup down the toilet and had caused a blockage, housemate Jack Tweed suggested that she should pick the bones out with her teeth[62] and allegedly referred to her as a "fucking Paki",[64] although show producers denied this and stated that the word used was "cunt".

[79] In response, a number of protesters, including members of the Hindu nationalist political party Shiv Sena,[80] beat burning the effigies of Gere with sticks.

[85] A two-judge bench of the Supreme Court headed by the Chief Justice of India subsequently dismissed the suit and suspended the arrest warrants.

[88] Having worked with Akshay Kumar in Main Khiladi Tu Anari (1994), Shetty began dating him on the set of Insaaf (1997), the latter having just broken up with actress Raveena Tandon.

[20] In February 2009, Shetty got engaged to Raj Kundra, with whom she was co-owner of the Indian Premier League (IPL) cricket team Rajasthan Royals.

[107][108] In February 2007, Shetty attended a reception at the House of Commons by invitation of Keith Vaz MP to meet with then Prime Minister Tony Blair.