The 2003's award winning film The Station Agent was a breakout role for Dinklage, and his first mainstream movie. Before The Station Agent, Dinklage appeared in 1995's arthouse hit Living in Oblivion, his debut film. As well as a career in film, Dinklage has starred multiple times in off-Broadway productions, where height is less of an issue than in Hollywood.

Dinklage had a minor role in Jon Favreau's Elf as a pretentious children's author who beats up Will Ferrell's character after he is (unintentionally) insulted. In 2005, Dinklage starred in the short-lived CBS science fiction series Threshold and appeared in the Michael Showalter comedy The Baxter as a "flamboyant" wedding planner. In 2006 Dinklage appeared in Sidney Lumet's latest courtroom drama, Find Me Guilty (2006), opposite Vin Diesel, and in episodes of Nip/Tuck. He also made a cameo appearance on the HBO television series Entourage.

Dinklage was chosen by director Andrew Adamson for the role of Trumpkin in the 2008 film The Chronicles of Narnia: Prince Caspian although film critic Bill Gibron described his role as a "cutesy stereotype [Dinklage] has tried to avoid...". Comic book writer (and incoming Wonder Woman writer) Gail Simone has cited Dinklage as the perfect choice to play the evil Dr. Psycho in a possible Wonder Woman film.