He got his start in film playing romantic leads, his first film being the romance Tammy and the Doctor (1963), which he called "Tammy and the Schmuckface." But Fonda's intensity impressed Robert Rossen, the director of Lilith (1964). Rossen envisioned a Jewish actor in the role of Stephen Evshevsky, a mental patient. Fonda earned the role after removing his boss' glasses from his face and putting them on so as to look more "Jewish." He also played the male lead in The Young Lovers (1964), about out-of-wedlock pregnancy, and The Victors (1964), an "anti-war war movie."

Peter Fonda was not a conventional "leading man" for Hollywood. While it has never been uncommon for actors and musicians to mix socially, in the mid '60s Fonda chose to align himself with rock counterculture rather than the shallower world of Hollywood actors. When he became a devoted fan of the Byrds, the rock counterculture had barely begun. Fonda formed a strong and enduring friendship with Gram Parsons and was so inspired by him that he decided to switch careers and become a musician, recording a number of Parsons songs despite his limited singing ability. In 1965, when the Beatles invited the Byrds to stay with them in England, Fonda went along with the group. It is said that the Byrds' song "So You Wanna Be a Rock Star?" was penned during this time, about Fonda. The Beatles' She Said, She Said was also inspired by Fonda when, while tripping on acid, John Lennon heard Fonda say, "I know what it's like to be dead." Increasingly influenced by Gram Parsons, Fonda became outwardly nonconformist and grew his hair long, alienating the "establishment" film industry and rejecting lead roles in Hollywood films, such as Love Story. He also rejected the lead in Rosemary's Baby because he had "uneasy feelings" about Roman Polanski. In 1966, Fonda was arrested in a Sunset Strip protest which the Los Angeles Police Department ended forcefully.

Fonda's nonconformism attitude publicly angered his father. "I dig my father. I wish he could open his eyes and dig me," he commented. His first counterculture-oriented film role was the lead character Heavenly Blues, a Hells Angel, in the Roger Corman-directed film The Wild Angels (1966). This film is still remembered for Fonda's "eulogy" delivered at the fiasco of a fallen Angel's funeral service, which was sampled in the Primal Scream recording "Loaded" (1991), and in other rock songs. Then Fonda played the male lead character in Corman's film The Trip (1967), a television commercial director experiencing the ambivalence and turmoil of divorce. (Fonda credits Jack Nicholson for the original screenplay of The Trip, which was modified in favor of the story actually filmed.). He used footage from various The Byrds concerts throughout the film.

In 1968 Fonda produced Easy Rider, the classic film for which he is best known. Inspired by Gram Parsons, Easy Rider is about a laid-back, long-haired biker traveling through the southwest and southern United States in a world of intolerance and violence. Fonda begged Parsons to appear as the lead, but the lowkey musician admitted he'd feel undercomfortable on camera. Fonda famously replied, "then give me your jacket and I'll be you." The Gram Parsons/Fonda character was the charismatic, laconic "Captain America"/Wyatt whose motorcycle jacket bore a large American flag across the back. Dennis Hopper played the garrulous "Billy" and Jack Nicholson was nominated for an Academy Award (TM) for Best Supporting Actor for his turn as George Hanson, an alcoholic civil rights lawyer who comes along. Fonda co-wrote Easy Rider with Terry Southern and Hopper, who directed.

They filmed the cross-country road trip depicted in Easy Rider almost entirely on location, spending US $375,000.00, and released the film in 1969 to massive success. Robbie Robertson and Bob Dylan were so moved by an advance screening that they approached Fonda and tried to convince him to let them write a complete score, even though the film was due for wide release in two days. Fonda refused, using the Byrds' song "Ballad of An Easy Rider," Dylan's "It's Alright Ma, I'm Only Bleeding" and "I Wasn't Born to Follow." Fonda, Hopper and Southern were nominated for the Academy Award (TM) for Best Original Screenplay.

Fonda received critical recognition for his part in Ulee's Gold (1997). Fonda portrayed a stoic north Florida beekeeper who, in spite of his tumultuous family life, imparts a sense of integrity to his wayward convict son, and takes risks in acting protectively toward his drug-abusing daughter-in-law. Fonda's performance resulted in an Academy Award nomination (TM) for Best Actor.

Fonda's choices of film roles are notable for extreme contrasts in type: The introverted and drug-dealing (and perhaps amoral) rebel biker in Easy Rider is a world apart from the war-veteran father in Ulee's Gold, a man whose strength is in his benevolence.

In his autobiography, Fonda writes of composing a song in 1980 for Gram Parsons entitled "My Brother" and refers to the accomplishment of writing a song as the one thing he's wanted to do his whole life.