She was next seen as Richard Dreyfuss' daughter, forced to pretend to be part of an imaginary civilization, in the uneven comedy "Krippendorf's Tribe" (1998). But Tamara Jenkins' "Slums of Beverly Hills" (also 1998) offered the rising star one of her best screen roles to date as a teenager coping with the onset of puberty and her dysfunctional (all male) family's constant movement from apartment to apartment. The young thespian delivered a winning and assured performance that anchored the uneven film. She followed with a decidedly supporting turn in the horror comedy "Revenant" (also 1998). In 2002, Lyonne was cast in the holocaust feature "Grey Zone." The following year, she co-starred in the drug, sex and club drama "Party Monster", a feature based on the life of Michael Alig, a once-ago, high-time club promoter who was convicted of murder. Later in 2003, Lyonne appeared as the avenging daughter of a film producer who suddenly dies in “Die Mommie Die!” (2003). In “Blade: Trinity” (2004), Lyonne played Sommerfield, a member of the Nightstalkers—a group of human vampire hunters who team up with Blade (Wesley Snipes) to hunt down Dracula and his gang of undead thugs.

After appearing in the unreleased indie comedy "Max & Grace," about a suicidal couple who break out of a mental institution, Lyonne suddenly started making more headlines for her personal travails than for her career. In December 2004 she was charged with criminal mischief, harassment and trespassing after she purportedly melted down on her New York neighbor, ripping a mirror off the woman's wall and threatening to sexually molest her dog. In August 2005 she was subsequently discovered in intensive care at a New York City hospital with hepatitis C, a collapsed lung and a heart infection.