Shelley began studying acting shortly after he was honorably discharged from the Navy. He enrolled as a drama student at Chicago's Goodman Theatre, where he met Sarah Herman, another aspiring thespian. They fell in love, and were married in 1947. After graduating from the Goodman Theatre, Shelley joined the Woodstock Players, a stock theater company in Woodstock, Illinois. It was here that Shelley had the opportunity to really develop and polish his acting skills, with the support and encouragement of fellow players Geraldine Page, Betsy Palmer, and Tom Bosley.

Leaving Woodstock in 1949, Shelley and Sarah made their way across the country, with Shelley in search of acting work. When those jobs were scarce, Shelley worked as a social director, a cab driver, a speech teacher, an assistant manager at a drug store, and an instructor at Arthur Murray Dance Studios. While in New York, Shelley found work as a sketch writer for Steve Allen's Tonight! show, and was doing well, when he received an invitation to join an improvisational troupe known as the Compass Players, which took him back home to Chicago. With Compass (which later evolved into Second City), Shelley got to work with many people who would go on to have very successful careers in show business, Mike Nichols and Elaine May prominent among them.

While performing improvised sketches with the Compass Players, Shelley began developing solo pieces, employing an imaginary telephone to take the place of an onstage partner. While watching Mort Sahl perform at Mister Kelly's in Chicago in 1957, Shelley realized he didn't necessarily have to tell traditional jokes as other comedians of the day did in order to work in nightclubs, and went on to audition at the club performing his one-man monologues and telephone routines, with great success. Those first dates at Mister Kelly's led to other nightclub engagements around the country, appearances on national television, and a recording contract with Verve Records. Inside Shelley Berman, released in early 1959, became the first comedy album to be awarded a gold record, and the first non-musical recording to win a Grammy Award. Shelley would eventually record six albums for Verve, including Outside Shelley Berman and The Edge of Shelley Berman, both of which also went gold. Shelley would go on to appear on numerous TV specials, and all of the major variety shows, including those hosted by Ed Sullivan, Steve Allen, Jack Paar, Dinah Shore, Perry Como, Andy Williams, and Dean Martin.

Shelley's great success as a comedian enabled him to continue with his first love - acting. He starred on Broadway in The Girls Against The Boys and A Family Affair, and would continue to do stage work in productions of The Odd Couple; Damn Yankees; Where's Charley?; Fiddler On The Roof; Two By Two; I'm Not Rappaport; La Cage Aux Folles; The Prisoner Of Second Avenue and Guys and Dolls, among many others. Comedic and dramatic acting roles on television began to come his way, including memorable appearances on episodes of Peter Gunn; The Twilight Zone; Rawhide; Bewitched; The Man From U.N.C.L.E.; The Mary Tyler Moore Show; Adam-12; Emergency; CHiPs; Night Court; MacGyver; L.A. Law; Friends; Walker, Texas Ranger; The King Of Queens; The Bernie Mac Show; Grey's Anatomy; Entourage; Hannah Montana; CSI: NY; Hawaii Five-0 (in 2012) and Boston Legal, where Shelley made numerous recurring guest star appearances as the hilariously semi-senile Judge Robert Sanders. From 2002 to 2009, Shelley appeared as Nat David (Larry David's father) on Curb Your Enthusiasm, a role for which he received a 2008 Emmy Award nomination. With dialogue entirely improvised by its cast, Curb Your Enthusiasm gave Shelley the opportunity to return to his improv roots, introduced him to a new generation of TV viewers, and brought him acclaim from critics and fans alike.

Among Shelley's film credits: The Best Man (with Henry Fonda); Divorce, American Style (with Dick Van Dyke and Debbie Reynolds); Every Home Should Have One (with Marty Feldman); '80s cult favorite Teen Witch; The Last Producer (with Burt Reynolds); Meet The Fockers (with Robert De Niro and Ben Stiller); The Aristocrats; The Holiday (with Cameron Diaz) and You Don't Mess With The Zohan (with Adam Sandler).

Shelley has authored four books, two plays, several TV pilot scripts, and numerous poems. In 2013, Shelley's first collection of poetry, To Laughter With Questions: Poetry By Shelley Berman, was published. Shelley had been writing and teaching poetry for many years, so the publication of this book was very much a source of great pride for him. For over twenty years, Shelley taught humor writing in the Master of Professional Writing program at USC, where he was made a Lecturer Emeritus.

Shelley retired from performing in 2014, after being diagnosed with Alzheimer's Disease. He passed away peacefully in his sleep on September 1, 2017. Complications from the disease were the cause of his death. He left behind a legacy of groundbreaking comedy, unforgettable characters, and beautiful poetry.