Damon started doing stand-up comedy in 1982. His earliest film appearance was a brief cameo as an effeminate hotel employee in the 1984 Eddie Murphy film Beverly Hills Cop. He was briefly on Saturday Night Live as a featured performer, before getting fired for playing his character as a flamboyant gay cop instead of a straight cop. He went against the script during the live performance. In the Saturday Night Live book Live From New York, it was stated that Wayans did this largely due to growing frustrations that his sketches were not being considered for the show and increasing stress. He also appeared in the syndicated TV series Solid Gold during the 1980s as a stand-up comedian. After that, he went on to co-create and appear in the TV-show In Living Color from 1990 to 1992, part of a team that was nominated for Emmy Awards all three years.
After In Living Color, he starred in films such as The Last Boy Scout, Major Payne and The Great White Hype and wrote and starred in the film Blankman. He also appeared in Janet Jackson's video "The Best Things in Life Are Free" and was considered for the role of The Riddler in Batman Forever (the role went to Jim Carrey, his co-star from In Living Color and Earth Girls Are Easy).