In 1978 he formed The Lounge Lizards, initially a “fake jazz” combo, with his brother Evan Lurie. The Lounge Lizards exhibited the talent of artists such as Calvin Weston, Billy Martin, Oren Bloedow, Steve Bernstein, Marc Ribot, among others. The band continued to make music for 20 years. During this time, Lurie recorded 22 albums and composed scores for over 20 movies, the most notable being Stranger than Paradise, Down by Law, Mystery Train, Clay Pigeons, Animal Factory, and Get Shorty, which earned him a Grammy nomination.
During the 1980s he starred in a number of films directed by Jim Jarmusch, namely Stranger Than Paradise, Down by Law, and Permanent Vacation. He went on to have roles in other notable films including Paris, Texas and The Last Temptation of Christ. Lurie also starred, during 2001-2003, on the HBO prison series Oz as inmate Greg Penders.
His 1991 TV series Fishing with John, which he wrote, directed and starred in, was a cult success. The critically acclaimed series aired on IFC and Bravo. Episodes included guests such as Tom Waits, Willem Dafoe, Matt Dillon, Jim Jarmusch and Dennis Hopper. It has since been released on DVD by Criterion.
In 1999 Lurie released the album The Legendary Marvin Pontiac – Greatest Hits, which was purportedly a posthumous collection of the work of an insane African-Jewish musician named Marvin Pontiac (1932-1977). Pontiac, however, was a fictional character,  and the music was actually written by Lurie, and performed by Lurie, Marc Ribot, and Tony Scherr. The album included praise from David Bowie, Iggy Pop, Leonard Cohen, and others, who were in on the joke, and a fictional “biography” was published in Allmusic.com
In a 2006 interview, Lurie said that he had been in ill health since the mid- to late 1990s, with a number of neurological symptoms, “sort of like malaria”, but that he is “90% certain that it is advanced Lyme disease.  Lurie said that his illness has kept him from acting or performing music, and that he spends most of his time in his apartment, painting.
For the last four years, Lurie has been exhibiting his paintings, and credits painting with “saving his life”, referring to his illnesses and seclusion.
In spring 2004, he had his first exhibition at Anton Kern Gallery, New York. Within 10 minutes of the opening night, all the pieces were sold. His subsequent exhibitions at Galerie Daniel Blau in Munich; Galerie Lelong in Zurich and Galerie Gabriel Rolt in Amsterdam were all met with equal success. Lurie was represented at the Basel International Art Fair in June 2005, 2006 and will be again this year. In January 2005, Lurie exhibited his second show in New York at Roebling Hall’s new Chelsea location. On April 30th 2006, Lurie opened his first solo museum show at P.S.1. Contemporary Arts Center, New York. In 2007 Lurie’s work was showcased at The Montreal Museum of Fine Art.
Lurie continues to exhibit in domestic and international venues in 2008. A collection of work was displayed at the NEXT Art Fair Chicago and Lurie’s work will be exhibited at the Mudam Luxembourg from October through December in 2008. In addition, The Museum of Modern Art has acquired his work for their permanent collection.
In the last two years Lurie has made his work available to the public via two art books. In June 2006, Lurie released his first book, “Learn To Draw”, a compilation of black and white drawings published by Walther Konig. In May 2008, Lurie’s most recent release, “A Fine Example Of Art” a hard cover, full color book of over 80 reproductions of his work, published by powerHouse Books was made available at select domestic and international book stores as well as on Amazon.com.
Lurie’s watercolor painting Bear Surprise achieved enormous popularity on numerous Russian websites, in an Internet phenomenon known as Preved. Lurie combined text and images in unique and interesting ways creating a personal mythology that breaks down the distinctions between real experiences and the imaginary. Lurie has showed his works at P.S.1 Contemporary Art Center, Roebling Hall, and Anton Kern gallery in New York, and Galerie Daniel Blau in Munich. They were on show at the Mudam museum in Luxembourg from October 11, 2008 to December 8, 2008. This exposition was titled The Skeleton In My Closet Has Moved Out To The Garden.