Banks changed her name to avoid confusion with actress Elizabeth Mitchell. She debuted in the independent film Surrender Dorothy, as Elizabeth Casey, and quickly gained widespread exposure through the comedy film The 40-Year-Old Virgin.

In August 2005, at the Williamstown Theatre Festival, Banks starred in William Inge's Bus Stop as Cherie, the sexy, blond, aspiring nightclub singer. Banks' portrayal was acted “with poise, clarity and a shrewd feel for Cherie's complexities. Her performance is all of a piece and in harmony, stylistically, with the performances around her….” In 2005, she appeared on the show Stella, and in May 2006, she had a role in the season five finale of the NBC comedy Scrubs as Dr. Kim Briggs, the love interest of J.D. (Zach Braff). The character has appeared throughout seasons six, seven and eight as a recurring guest star.

In 2006, Banks appeared in the American football drama film Invincible, in which she played Mark Wahlberg's love interest. The film is based on the true story of bartender Vince Papale. Later, she and co-star Walhberg were nominated for the “Best Kiss” award at the MTV Movie Award. Also that year, she landed the starring role in the comedy-horror Slither. The film was not well received by critics, however, and grossed $12 million worldwide, less than half the budget of the film.

In 2007, she played the female lead in the comedy Meet Bill, alongside Aaron Eckhart and Jessica Alba. Also that year, Banks had a small role in the Christmas comedy film Fred Claus, co-starring Vince Vaughn and Paul Giamatti. In 2008, she played a love interest in the comedy Definitely, Maybe, alongside Isla Fisher and Ryan Reynolds, starred with Seth Rogen as the eponymous female lead in the Kevin Smith comedy Zack and Miri Make a Porno, and played United States First Lady Laura Bush in W, Oliver Stone's biopic of George W. Bush.

In 2009, Banks appeared in the thriller The Uninvited, a remake of the Korean horror film A Tale of Two Sisters. The film was about an intrusive stepmother who makes life miserable for the teen daughters of her new husband. Banks based her character, Rachel, on Rebecca De Mornay's character in The Hand That Rocks the Cradle”. “It was very important to me that every line reading I gave could be interpreted two ways,” says Banks of her role, “So that when you go back through the movie you can see that”.

Banks is a frequent co-star of actor Paul Rudd, the two having appeared in four films together to date (Wet Hot American Summer, The Baxter, The 40 Year Old Virgin, and Role Models). “There was a David O. Russell movie that I really wanted to make with Vince Vaughn that ended up falling apart”, said Banks, referring to the film H-Man Cometh, in a January 2009 interview.

On December 8, 2009, it was announced that Banks would appear in at least four episodes of the Emmy-winning sitcom 30 Rock as a love interest for Jack Donaghy (Alec Baldwin). She went on to appear in nine episodes of the fourth season. Banks is set to star alongside Leslie Mann in What Was I Thinking?, based upon the book by Barbara Davilman and Liz Dubelman.