Farrar formed Uncle Tupelo with Jeff Tweedy and Mike Heidorn in 1987 after the lead singer of their previous band, The Primatives, left to attend college.

After the dissolution of Uncle Tupelo in 1994, Farrar formed the rock group Son Volt, whose original lineup released three albums in the late 1990s, before undergoing a hiatus in 1999.

In 1999, Farrar was invited to participate in the tribute album for Moby Grape co-founder Skip Spence, who was terminally ill with cancer.

Eric Heywood, Mark Spencer from the Blood Oranges, and the rock group Canyon have often accompanied Farrar in his solo recordings and performances.

Farrar collaborated with Ben Gibbard (of the indie rock band Death Cab for Cutie) to create all of the music for the soundtrack for the 2009 documentary film One Fast Move or I'm Gone, about Jack Kerouac's time spent at Big Sur.

[2] In 2012, Farrar, along with Will Johnson, Yim Yames, and Anders Parker collaborated on the Woody Guthrie archive project, New Multitudes.