Adlon's first major international acclaim came with "Sugarbaby" (1985), an off-beat love story featuring a subway conductor and a portly, female mortician. It was praised for its joyful portrayal of sexual desire on the part of an unglamorous, overweight woman (played by Marianne Sagebrecht, who was also at the center of Adlon's later success, "Bagdad Cafe" 1987). "Bagdad Cafe", an off-beat tale of a German woman, stranded in a desolate California outpost, whose optimism and positive energy touches the lives of all around her, became a cult hit and one of the top-grossing foreign films of all time.
Sagebrecht also starred in "Rosalie Goes Shopping" (1989) as a German war bride attempting to maintain her family's high standards of living with credit cards. In this satire, Adlon poked fun at American consumerism, although some critics found the film lacking his usual gentle understatement. He subsequently directed singer k d lang in her feature debut, "Salmonberries" (1991), which focused on the growing friendship of a half-Eskimo woman and a female refugee from East Germany. Adlon's 1993 comedy "Younger and Younger" centered on an unfaithful husband (Donald Sutherland) who begins to have visions of his dead wife (Lolita Davidovich) in which she successively becomes younger and more beautiful.
Adlon's wife Eleonore has produced all but one of his films and wrote the script for "Bagdad Cafe"; their son Felix is also a filmmaker.