She began screen acting in 1983 when she appeared in the film Molly. In 1987, she went on to appear in Phillip Noyce's Echoes of Paradise and appeared alongside Judy Davis in Gillian Armstrong's High Tide that same year.

In 1993, Karvan won an Australian Film Critic's Circle award for Best Actress for her role in The Heartbreak Kid. Karvan has starred alongside many of Australia's leading men, including Guy Pearce in Flynn (1992) and Dating the Enemy (1996), Ben Mendelsohn in The Big Steal (1990) and Hugh Jackman in Paperback Hero (1999). In 2006, she had a role in Footy Legends, a film about rugby league. She also played the role of Hailey's (Joanna Levesque) mother in the American film Aquamarine.

Karvan appeared in Star Wars Episode III: Revenge of the Sith as Sola Naberrie, the older sister of Padmé Amidala. She also filmed scenes for Star Wars Episode II: Attack of the Clones, but her scenes were cut and appear only on the DVD release.

In 2009, she voiced in the film $9.99. She appeared in the 2010 film Daybreakers, a vampire thriller co-starring Ethan Hawke and Sam Neill and filmed on the Gold Goast. She will also co-star with Jim Caviezel in Nature's Grave, directed by Jamie Blanks.