In addition to winning larger roles in such films as Fresh Horses (1988), Stiller continued to make comedy shorts, including the 1989 Elvis Stories, a spoof of obsessive Elvis fans featuring John Cusack. One of his shorts, a Tom Cruise parody called "The Hustler of Money," won Stiller a spot as a writer and player on Saturday Night Live in 1989. His stint on the show was short-lived, but led to his own MTV vehicle, The Ben Stiller Show. Featuring the likes of Janeane Garofalo and Andy Dick, the show was eventually dropped, first by MTV and then by Fox, but Stiller did pick up an Emmy for comedy writing in 1993.

The following year, he made his feature film directorial debut with the twenty-something angst comedy Reality Bites, in which he also starred alongside Winona Ryder and Ethan Hawke. The film was a relative critical and commercial success; unfortunately, Stiller's next directorial effort, the 1996 The Cable Guy, was a flop. A black comedy that cast Jim Carrey as the psychotic title character, the film failed to register with critics and audiences, many of whom couldn't stomach the idea of Carrey's playing such a dark character.

After a part in the Adam Sandler comedy Happy Gilmore, Stiller bounced back with a starring role in David O. Russell's Flirting with Disaster (1996). The relatively positive reception afforded to that comedy helped to balance out the relative failure of Stiller's other film that year, If Lucy Fell. It was not until two years later, however, that Stiller truly stepped into the limelight. Thanks to starring roles in three very different films, he emerged as an actor of versatility, equally adept at playing sensitive nice guys and complete jerks. In the smash comedy There's Something About Mary, he could be seen as the former type of character, earning permanent notoriety for various scenes featuring misplaced bodily fluids and mangled genitalia. He then did time as a not-so-nice guy in Neil LaBute's Your Friends and Neighbors, playing a philandering theatre instructor. Finally, he starred in Permanent Midnight, earning critical acclaim for his portrayal of a heroin addict.

Now possessing solid footing in Hollywood, Stiller went on to star in Mystery Men (1999) as the leader of a group of unconventional superheroes. He also had a supporting role in The Suburbans, a comedy about the former members of a defunct New Wave band.