Dillon has performed on the Broadway stage, appearing as Agnes in the 1974 revival of Gypsy starring Angela Lansbury; in the 1975 revival of Thornton Wilder's The Skin of Our Teeth; in the 1980 stage version of Harold and Maude; and as Mickey in the 1983 Gershwin musical My One and Only, starring Tommy Tune and Twiggy, for which she received a nomination for a Tony Award for Featured Actress in a Musical. She later appeared as a replacement cast member in the 2003 Broadway play Enchanted April.
Dillon had auditioned for SNL's premiere season in 1975, and though she was passed over by Lorne Michaels, she got to perform her "Talent Night at the Convent" act during the show's third episode, broadcast October 25, 1975.
Dillon made her big screen debut in Saturday Night Fever, playing Doreen, who asks John Travolta's character Tony if she can wipe his forehead. Later, she appeared for a short time on Saturday Night Live in 1980-1981 during the troubled tenure of Jean Doumanian. (Dillon was the shortest cast member in Saturday Night Live history at 4'11" (150 cm).) Dillon found more success as Toby Pedalbee, the abusive yet loyal assistant on the HBO cable sitcom Dream On, starting in 1990. She was the voice of Meadow Morn in the 1983 animation The Magic of Herself the Elf. Other television roles include an episode of Night Court entitled "Educating Rhonda" (Dillon). She played Judy on the TV series comedy Dr. Science (1987).
In regional theatre, Dillon appeared in the new musical Triumph of Love at Center Stage, Baltimore, Maryland, in December 1996, as one of a "comic trio of clowns". She appeared in the Tennessee Williams plays 8 by Tenn at the Hartford Stage in 2003. Dillon starred as Beatrice in the world premiere of Tom Dudzick's Don't Talk to the Actors at Studio Arena Theatre in Buffalo, New York in September 2007. In October - November 2010 she appeared in a new musical in "development", Roald Dahl's James and the Giant Peach at Goodspeed Musicals in Chester, Connecticut. In January 2012 she stars as Berthe in Boeing-Boeing at Hartford Stage.
Dillon has headed the "Improv Nation", based in the Hudson Valley (New York), since 2006. She is an Artist in-Residence at SUNY Ulster where she teaches improvisation and is on the faculty of Primary Stages.
