After graduating from the University of Toronto, Shaffer landed the job of musical director for a Toronto production of "Godspell" (a show he would conduct on Broadway in 1976), and the composer-lyricist Steven Schwartz invited him to play piano for Broadway's "The Magic Show" (1974). Hired for the original band of NBC's "Saturday Night Live", he played keyboards, composed musical material and acted in skits from 1975 to 1980, taking a brief hiatus to star in the short-lived comedy series "A Year at the Top" (CBS, 1977). The "SNL" experience led him to collaborate with Gilda Radner on songs (and also play keyboards) for her Broadway Show, "Gilda: Live from New York" (1979), and he received screenwriting credit for the feature "Gilda Live" (1980), besides performing. He also worked as musical director for The Blues Brothers (Dan Aykroyd and John Belushi) on two albums ("Briefcase Full of Blues" 1978 and "Made in America" 1980) and their 1979 US tour and performed with the 90s incarnation of the group as part of the "Blues Brothers Bash" during the Super Bowl XXXI half-time show and in the feature "Blues Brothers 2000" (1998).
Shaffer played Artie Fufkin, the irrepressible promotional man, in Rob Reiner's parody of a rock documentary, "This Is Spinal Tap" (1984), provided the voices of Optilow and Hermes for the animated features, "Light Years" (1988) and "Hercules" (1997), and had cameos in "Scrooged" (1988) and "Look Who's Talking Too" (1990). On TV, he has appeared frequently as both a musical performer and as an actor in comic sketches with the likes of Steve Martin and Martin Short. Shaffer executive produced and starred in the Cinemax comedy special "Paul Shaffer: Viva Shaf Vegas" (1987), also writing its theme song, and hosted MTV's "Rate the 80s" (1989). He served as musical director for the first 10 induction ceremonies (1986-95) at the Rock-and-Roll Hall of Fame and for the closing ceremonies of the 1996 Summer Olympic Games, coordinating such artists as Stevie Wonder, Gloria Estefan, B.B. King, Little Richard and Al Green.