Returning to Australia in 1988 to star in the hit stage musical Big River during its popular eighteen month national tour, she received a nomination for a Green Room Award for Best Supporting Actress in a Musical for her performance as Southern belle Mary Jane Wilks.

While still maintaining her solo career, in 1990 Karen joined The Seekers touring nationally and internationally. The following year, joined by the group's main song writer Bruce Woodley and the National Boys Choir she recorded the much loved song I Am Australian which she has since performed at various events including the Prime Minister's Dinner for Melbourne's Olympic Bid.

The next two years saw her recording and producing her fourth album A Night of Carols, also featuring the Australian Girls Choir, and travelling to the U.S. for the recording of Moonglow, her fifth album and first world-wide release, produced by acclaimed audio engineer and renowned audio manufacturer David Manley on all-valve, high-end equipment with the support of many Los Angeles' notable musicians.

During 1997 Karen wrote and performed a new musical composition at the Aboriginal Reconciliation Convention, highlight of the important national campaign aimed at uniting Australia's white and indigenous communities. She also promoted Reconciliation Day throughout her appearances on community service announcements and television programmes such as McFeast. The next year, together with former Australian Prime Ministers Malcolm Fraser and Gough Whitlam, Wimbledon tennis legend Evonne Cawley, business icon Dick Smith and other eminent Australians, Karen was appointed as one of the Inaugural Ambassadors for Reconciliation by the Reconciliation Council. During the same year, she was also nominated for an Australian Humanitarian Award for her Services to the Arts.

In 1999 she acted as joint executive producer for the program Christmas In Concert with Karen Knowles broadcast throughout Queensland on the Seven Network with top ratings.

Segments have since been sold and aired on the Disney Channel with the full program now available on video. In 2000 Karen recorded and released her latest album By Request which features many of the most requested songs at her live performances.

Parallel to her recording career, Karen has always maintained an extensive national and international live schedule with performances at the Australian Olympic Committee Dinner, Australian Tourism Awards, ABM Top 500 Business People of the Year Awards, Tokyo's Australian Society Ball, Expo `90 Osaka, corporate conventions for Mercedes Benz, UTAG and AMP, guest appearances with Australia's leading Symphony and Philharmonic Orchestras and solo concerts at all major Arts Centres. In 2002 she toured all major Arts Centres in Queensland, performed in cabaret at Capers and Chapel Off Chapel in Melbourne and in concert at various venues and appeared at many special events and Christmas concerts throughout the country. In 2003 she continued with a similar live schedule and towards the end of last year also released her most recent CD "On a clear day" which has been well received.

As a performer and interviewee she has appeared consistently on all leading television programs on all national television networks, acted as a presenter for Hume Building Society's commercials and as a regular judge on Network Ten's popular series New Faces.

In 2004 after many years of requests she opened her own school, “The Karen Knowles Singing School” which has been hugely successful. The School is now open in four centres in Melbourne, opening in Perth in January 2005 and extending nationally in the longer term.

In mid-2006 Karen appeared as one of the professional singers on Channel Seven's high rating television program "Ït Takes Two" which was Seven's most successful program launch for the year. While continuing to also run the Singing School, Karen noticed the different ways people learn. Based on this and her experience with self-expression over more than 30 years, Karen developed a new method of communication, self-development and learning. Karen noticed the many benefits and parallels for many market sectors beyond performance and has since developed a new method of communication and a new way of relevant and personalised learning that is now being developed for the digital environment. The new method and system of communication was patented in mid-2007. Since then Karen has been working with various advisors to roll out this new business venture globally in many different versions and applicable to various market sectors.

In late 2007, Karen was asked to join the ARIA Award winning Choir of Hard Knocks as a special guest vocalist on their new album "Songs of Hope & Inspiration" and Karen joined the Choir as a special guest artist at their concert at the Vodafone Arena in Melbourne in early December 2007. Karen continued to tour for performance events throughout December 2008 and appeared with her usual accompanist David Cameron and Carneval Strings at the Burnie Shines Festival in Tasmania. Karen performed with another internationally renowned baroque string ensemble, Latitude 37 (comprising accomplished baroque viola, viola da gamba and harpsichord players) in their first performances together in November 2009 in Melbourne, drawing on her classical training to perform 16th century pieces by composers such as Dufay and Arbeau. Future collaborations with Latitute 37 and the Ironwood Chamber Ensemble are planned.

In early 2010 Karen collaborated with composer and sound artist Darrin Verhagen creating a vocal soundscape for the Melbourne Theatre Company's production of “Madagascar”. Karen collaborated on further projects with Darrin in 2010 and 2011 including a vocal soundscape for a US dance company and a soundscape for the Chamber Made Opera's production of "Ophelia". Karen has also recently collaborated with Uncle Bob Randall, a traditional elder of Central Australia and one of the founders of Australian indigenous music and remains committed to fostering a fair and respectful engagement with indigenous and non-indigenous Australians. Karen also continues with performances at various regional arts centres, other concert venues and carols events such as IGA Carols by Candlelight in Brisbane.

In 2014 Karen performed at the Inaugural Do Lectures at Payne's Hut and continued to perform at Arts Centres regionally. In 2014 after many years of planning, Karen founded a new organisation "Wiilpa" (www.wiilpa.org) and is producing a series of events in association with the Global Leadership Foundation and other partners. Joining forces with Archie Roach, Shane Howard and national indigenous elders (Uncle Bob Randall Aunty Carolyn Briggs and Min Mia) and with involvement from business, community and environmental leaders, Wiilpa is producing "The Remembering Concert" a feature event at the Palais Theatre Melbourne as part of the Sustainable Living Festival 2015. See the upcoming performances page for details on all of Karen’s future live performances.