Vélez`s first feature-length film was Douglas Fairbanks`s The Gaucho (1927); the next year, she was named one of the WAMPAS Baby Stars, the young starlets deemed to be most promising for movie stardom. Most of her early films cast her in exotic or ethnic roles (Hispanic, Native American, French, Russian, even Asian).

Within a few years Vélez found her niche in comedies, playing beautiful but volatile foils to comedy stars. Her slapstick battle with Laurel and Hardy in Hollywood Party and her dynamic presence opposite Jimmy Durante in Palooka (both 1934) are typically enthusiastic Vélez performances. She was featured in the final Wheeler & Woolsey comedy, High Flyers (1937), doing impersonations of Simone Simon, Dolores del Rio, and Shirley Temple.

Vélez was now nearing 30 and hadn`t yet become a major star. Disappointed, she left Hollywood for Broadway. In New York, she landed a role in You Never Know, a short-lived Cole Porter musical. After the run of You Never Know, Vélez looked for film work in other countries. Returning to Hollywood in 1939, she snared the lead in a B comedy for RKO Radio Pictures, The Girl from Mexico. She established such a rapport with co-star Leon Errol that RKO made a quick sequel, Mexican Spitfire, which became a very popular series. Vélez perfected her comic character, indulging in broken-English malaprops, troublemaking ideas, and sudden fits of temper bursting into torrents of Spanish invective. She occasionally sang in these films, and often displayed a talent for hectic, visual comedy. Vélez enjoyed making these films and can be seen openly breaking up at Leon Errol`s comic ad libs.

The Spitfire films rejuvenated Lupe Vélez`s career, and for the next few years she starred in musical and comedy features for RKO, Universal Pictures, and Columbia Pictures in addition to the Spitfire films. She was very popular with Spanish audiences, and lent her services toward improving the film industry in Mexico.

In the mid-1940s, she had a relationship with the young actor Harald Maresch, and became pregnant with his child. Vélez, following her Catholic upbringing, refused to have an abortion. Unable to face the shame of giving birth to an illegitimate child, she decided to take her own life. Her suicide note read, "To Harald, may God forgive you and forgive me too but I prefer to take my life away and our baby`s before I bring him with shame or killing him, Lupe."

She retired to bed after taking an overdose of sleeping pills. According to newspaper accounts, her body was found by her secretary and companion for ten years, Beulah Kinder.

A well-known urban myth tells that Vélez was ultimately found in the morning with her head in the toilet. Variations on this story include versions in which she had either drowned in the toilet or that she had tripped and was found in the toilet with a broken neck.