Shannon began her own recording career in 1989, working with producer John Dunford and musicians such as Adam Clayton, Mike Scott and Steve Wickham. This led to Shannon’s joining their band, The Waterboys. She was with the band for eighteen months, and contributed both accordion and fiddle to their Room to Roam album. Her first world tour was with The Waterboys. She left the group shortly after Wickham’s departure, as the band was forced back to a more rock and roll sound.

Her debut album, in 1991, Sharon Shannon is the best-selling album of traditional Irish music ever released there.

Sharon’s track, “Cavan Potholes”, written by Dónal Lunny is featured on the 1996 compilation Common Ground: Voices of Modern Irish Music. Other stars on the album include Sinéad O’Connor, Elvis Costello, Kate Bush and Bono.

Sharon’s fourth album titled Spellbound was released in September 1998. This compilation featured new material, live tracks and also tracks from previous albums. Also in 1998, she was asked by violinist Nigel Kennedy to join a him in performing on his “Jimi Hendrix Suite”, later performing this work in some major European cities.

Her 2000 album, The Diamond Mountain Sessions, which included vocals from a wide variety of artists, was also a commercial success, being certified triple platinum.

Shannon recorded with Steve Earle on the song “The Galway Girl”, which was released on both Earle’s album Transcendental Blues, and Shannon & Friends’ The Diamond Mountain Sessions. Both albums were released in 2000.

Another collaboration with Earle was the instrumental “Dominic Street”, released on Earle’s 2002 album Sidetracks. Shannon has also worked with Jackson Browne, the band Coolfin, Dónal Lunny, Moya Brennan, Kirsty MacColl, Christy Moore, Sinéad O’Connor, Liam O’Maonlai, Mundy and John Prine, amongst others.

In 2004, Shannon released the album Libertango with guest spots from Róisín Elsafty, Sinéad O’Connor and the late Kirsty MacColl.

In 2005, she appeared on Tunes, a collaboration with Frankie Gavin, Michael McGoldrick, and Jim Murray.

In 2006 a celebration of 15 years of recording came out with The Sharon Shannon Collection 1990–2005.

In 2007 Shannon has worked with Belinda Carlisle for her album Voila.

She continues to record her music and perform with her tour band, The Woodchoppers. A live version of Galway Girl recorded with Mundy was the most downloaded track in Ireland in 2007, winning a Meteor Award.

In 2008, Shannon featured in the Transatlantic Sessions.

In 2009, she played “Galway Girl” live at the Meteor Music Awards 2009, where she also picked up a Lifetime Achievement Award and won Most Downloaded Track again for Galway Girl with Mundy.

Shannon features playing accordion on The Lee Thompson Ska Orchestra single “Bangarang”, which also features Dawn Penn as vocalist. It was released on 26 May 2014.

In October 2018, NUI Galway awarded Shannon an honorary doctorate.