Nilsson signed with RCA and released an album, Pandemonium Shadow Show (1967), which was a critical, if not commercial, success. The album included a medley of Beatles songs, "You Can't Do That", and that band quickly became enamored of him, leading John Lennon and Paul McCartney to name him their favorite American singer (and group) at the press conference announcing the formation of Apple Records.
Pandemonium Shadow Show was followed in 1968 by Aerial Ballet, an eccentric album that included "Everybody's Talking", which became a success after it was used as the theme song for Midnight Cowboy.
Nilsson released several albums in the 1970s, one a cover of Randy Newman songs and another the soundtrack to The Point, an animated children's story, as well as a new hit single, "Without You" from Nilsson Schmilsson (1971), which also included "Coconut" and "Jump Into the Fire".
This was followed by A Little Touch of Schmilsson in the Night (1973), a collection of pre-rock and roll standards. Also in the 1970s, Nilsson and John Lennon became good friends, leading to a much publicized incident when they were thrown out of a club in Los Angeles, California, due to excessive drunkenness. Lennon produced Nilsson's next album Pussy Cats. Nilsson also worked with Ringo Starr on a film, Son of Dracula. Despite some releases over the next decade or so, Nilsson faded out of the music scene and died in 1994 of a massive heart attack. His songs "I Guess the Lord Must Be in New York City," "Remember," "The Puppy Song," and his recording of "Over The Rainbow" were featured on the soundtrack of the 1998 movie "You've Got Mail".