In 1976, he played Bugsy Malone, in the film of the same name but Scott Baio got his first major role as Fonzie's tough cousin, Charles 'Chachi' Arcola, at 16 on the then already popular television show Happy Days. In 1982 he starred in a spin-off of Happy Days entitled Joanie Loves Chachi, which lasted only one season. That same year he appeared opposite future Charles in Charge costar Willie Aames in the film Zapped!, the story of a boy who obtains telekinesis and subsequently uses it to "zap" the clothing off of attractive females.

Baio made his first album for RCA in 1982, self titled, it featured songs including "What was in that Kiss," "How Do You Talk to Girls," and "Wanted for Love." He released a second album for RCA in 1983 entitled The Boys Are Out Tonight, feaured songs included the self-titled tune, "Some Girls", "She's Trouble" & "Fingerprints". He was a teen idol featured in teen magazines, often with no shirt on.

"Wa Wa Wa!" - was his catch phrase in Happy Days, it was emphatic variation on "Yes Sir", dating back several generations at least. In every day usage, indicates jubilation or surprise.

During his Happy Days run, Baio also became known as the star of After school specials such as The Boy Who Drank Too Much and Stoned.

In 1984, after Happy Days ended, Baio starred as a male nanny on Charles in Charge, a show which lasted until 1990.

Since the end of Charles in Charge, Baio has appeared in other, short-lived sitcoms, including Baby Talk (1991) and Rewind, which was picked up by the Fox network in 1998 but was canceled before any episodes aired. Between 1992 and 1995, he played Dr. Jack Stewart in the successful Diagnosis: Murder franchise, which kept him in the public spotlight. He also starred in the independent films Very Mean Men Face To Face (a.k.a. Italian Ties) , and The Bread, My Sweet (a.k.a. A Wedding For Bella), which won several prizes at various regional film festivals. Baio worked behind the scenes as a producer and co-scriptwriter as well. He joined Arrested Development for the Fox sitcom's third season in fall 2005 as the Bluth family lawyer, Bob Loblaw (so named because it sounds like "blah blah blah" when spoken). He took over the role as lawyer from his former Happy Days co-star Henry Winkler ("Fonzie").