Townsend had a brief uncredited role in the movie Cooley High (1975). His career hit mainstream in the early 1980s. This included stand-up comedy routines which appeared on cable television. Townsend established himself when he wrote, directed, produced, and starred in the comedy Hollywood Shuffle his 1987 film about struggling black actors in Hollywood. Prior to Shuffle, he appeared in small parts in films like A Soldier's Story (1984), directed by Norman Jewison, and after its success garnered much more substancial parts in films like The Mighty Quinn (1989) with Denzel Washington. He created and produced two television variety shows—the CableACE award–winning Robert Townsend and His Partners in Crime for HBO, and the Fox Television Variety Show Townsend Television (1993). He also created and starred in the WB Network's sitcom The Parent 'Hood (1995).
On the big screen, he has directed Eddie Murphy in Eddie Murphy: Raw (1987); Halle Berry and Martin Landau in B*A*P*S (1997); James Earl Jones and Bill Cosby in The Meteor Man (1993), which Townsend also wrote and in which he starred. Other credits include The Five Heartbeats (1991); Love Songs (1999), a TV movie starring Louis Gossett, Jr., and Andre Braugher; the Disney family film Up, Up, and Away (2000); and the LGBT TV movie Holiday Heart, starring Ving Rhames.
At the 2001 Image Awards of the National Association for the Advancement of Colored People, Townsend had directed three actors nominated in the best actor/actress category in three different films: Leon Robinson, for his role in Little Richard, which Townsend directed for NBC; Alfre Woodard, for her role in the Showtime Movie Holiday Heart (2000), which also garnered her a Golden Globe nomination; and Natalie Cole as herself in Livin' for Love: The Natalie Cole Story (2000), for which she won the Image Award for best actress. Townsend also produced the television films Carmen: A Hip Hopera (2001) and 10,000 Black Men Named George.
Townsend was most recently director of programming at the Black Family Channel, but the network folded in 2007.