Bakshi made a name for himself in animation during the fading days of theatrical studio cartoons. At the Terrytoons studio (best known for the Mighty Mouse cartoons), he produced a series of superhero spoof cartoons called The Mighty Heroes. He then moved to Paramount Studios, where he was placed in charge of the Famous cartoon studio during its final days. He produced several experimental animated short cartoons, though none of them had a major impact with audiences. Paramount closed its cartoon studio for good in 1967. In 1968, he headed a low-budget but distinctive TV animated series based on the Spider-Man comic book; new episodes appeared up to 1970. After 1970, Bakshi went into full-length animated feature films.
Bakshi's first feature film, an animated version of R. Crumb's Fritz the Cat, was a box-office hit, attracting audiences possibly as much for shock value as for its quality as a movie. It was the first animated feature film to be rated X, and it was unquestionably aimed primarily at adult audiences -- something that had been unheard of in the years before its release. The success of Fritz the Cat gave Bakshi the opportunity to produce two more additional adult-oriented feature films, Heavy Traffic and Coonskin, which revealed Bakshi's interest in black history in America (another subject largely overlooked by Hollywood movie studios). But in spite of the impressive quality of these films (often credited by film critics as his best work), these films offended many viewers and died at the box office.
Bakshi became a self-proclaimed spokesperson for a new direction in animation during the 1970s, and he turned to the process of rotoscoping to cut costs while still trying to produce quality animation. This sparked a new controversy over the use of traced-over live action in his films; animation scholars accused him of not producing "real" animation, but simply training artists to trace over live action. The rotoscoping content of Bakshi's films increased to the point where the movie American Pop consisted entirely of rotoscoping. Critics and animation fans wondered whether it had been necessary to use animation at all, since everything in the movie could just as easily have been filmed in live-action.
Bakshi's most well-known work after Fritz the Cat came in 1978, when he directed an ambitious animated adaptation of J.R.R. Tolkien's Lord of the Rings. This first attempt to capture Tolkien's vision on screen did not appeal to mass audiences, however, and Bakshi was forced to abandon his plans for a sequel. The movie only portrayed the first half of Tolkien's story (ending halfway through the second book, The Two Towers), and Tolkien's fans were left with a disappointing film legacy for the story for over twenty years, until the story was filmed again in the early 2000s.
Bakshi directed two more animated films in the 1980s, but Hollywood turned its back on animation and Bakshi worked behind the scenes for most of the decade. His biggest success in the 1980s was a TV cartoon series aired in 1986: The New Adventures of Mighty Mouse. Bakshi's series was widely hailed by TV critics, and it is still prized by collectors of TV series today. However, the series did not gain high ratings, and it was cancelled.
The field of animation entered a new renaissance after Who Framed Roger Rabbit revitalized the industry in 1988. Bakshi returned to the big screen with a more adult-oriented version of the "animated characters interacting with real-world people" in 1992 with Cool World, but the movie was a box office disappointment. Bakshi has not officially retired, but he has not produced animated feature films since then.
Bakshi produced a short-lived animated TV series called Spicy City in 1997.