Molloy grew up in the Australian Capital Territory before moving to Melbourne in the mid 1980s to study performing arts at the University of Melbourne where he wrote his and performed in his first live act in 1987. He also attended Maroondah Secondary College. It was also during this time that he met the Australian comedy troupe The D-Generation (the future cast of The Late Show, members of which would later form Working Dog Productions and with whom Mick would collaborate on several projects).

Molloy worked with the D-Generation as a writer-performer on their 1988 Seven Network specials (he had auditioned for the D-Gen in 1986, but it wasn’t until the troupe saw him in the 1987 Melbourne University revue, Laminex on the Rocks, that they signed him up). He also worked as a writer on the ABC's The Gerry Connolly Show (1988) and Network Ten series, The Comedy Company in its 1989 season. After writing and performing on The D-Generation Breakfast Show on Triple M radio from 1990 to 1992, teaming up with Tony Martin for Triple M’s Bulltwang (1990) and working on the (unscreened) pilots for The Late Show for the Nine Network (1990), Molloy was on board ABC TV’s The Late Show (1992–1993) as a writer/performer. As well as pairing up with Tony Martin for each episode’s introduction and the Street Interviews segment, Mick co-hosted the segments Muckrakers with Jason Stephens and Commercial Crimestoppers with Santo Cilauro, played the thick-witted assistant of stuntman Rob Sitch in Shitscared, and performed in countless sketches (he provided the voices of Sergeant Olden in The Olden Days and Chief Chromedome in Bargearse). Molloy also delivered a series of volatile rants in the Mick’s Serve part of Late Show News.

After the programme finished, Mick developed, with Tony Martin, the successful Austereo radio programme Martin/Molloy (1995–1998), which produced three ARIA award winning compilation albums, The Brown Album (1995), Poop Chute (1996) and Eat Your Peas (1998). Mick occasionally appeared with his former D-Gen cohorts on Network Ten’s The Panel (1998–2004).

Molloy landed his own late-night TV show, The Mick Molloy Show, which premiered on the Nine Network in 1999. Planned to run for twenty episodes, it was slated by the critics and cancelled after only eight, but Molloy bounced back with a video release entitled Shonky Golf with Mick Molloy and he directed the feature-length documentary Tackle Happy (2000). He played Kim's dad Gary Poole on Kath & Kim (2003–04) and co-starred, with David Wenham, in two Murray Whelan telemovies, Stiff and The Brush-Off (both 2004). He hosted another radio show, Tough Love with Mick Molloy (2004–06) on Triple M alongside Robyn Butler and Richard Molloy,, and a TV show, Any Given Sunday with Nicole Livingstone on the Nine Network in 2006. He was involved in the 2006 Commonwealth Games coverage on the Nine Network, as a commentator for the lawn bowls events.

He has starred in three movies, Crackerjack (2002) (which he also co-wrote, receiving an AFI nomination), Tony Martin's Bad Eggs (2003), and BoyTown (2006), which, like Crackerjack, he co-wrote with his brother Richard Molloy. In the 2006 Australian feature film Macbeth, Molloy played Brown; it was the second time he has appeared in a production of Macbeth.

In 2007, Molloy filmed a pilot of The Nation, a weekly late-night news-based comedy hour on the Nine Network. The show debuted on June 5, but struggled for ratings, attracting only 575,000 viewers nationally for its fourth show. Originally it was on Tuesdays at 9:30pm, but was moved to Wednesdays at 10:30pm and has been off air since the end of August 2007.

In 2008 it was announced that Molloy would replace Peter Helliar on the panel of Channel 10's Before the Game, an AFL themed show, after Helliar had discontinued his position post-2007. On the show, his views as a keen supporter of the Richmond Football Club (Tigers) are often made clear. Molloy is one of the club's more prominent supporters and as well as appearing on the Before the Game, he has in the past appeared in a club membership advertising campaigns.

Molloy was the long-term partner of actress Sophie Lee during the 1990s (Lee regularly appeared on Molloy's nationally syndicated radio show, as well as playing Tracey Kerrigan in the film The Castle, which was made by Molloy's former D-Gen cohorts).

In February 2010 it was announced that Molloy and Eddie Mcguire would be investigated by the NSW Anti-discrimination board following complaints that their on air coverage of the Vancouver Winter Olympics men's figure skating contained homophobic remarks.