On the advice of a local choirmaster, she went to study with Joseph Hislop in Stockholm, where she joined the Royal Opera and made her debut in 1946 as Agathe in Carl Maria von Weber's Der Freischütz. A year later she achieved a major success there as Giuseppe Verdi's Lady Macbeth. Other successes followed, particularly in Vienna and Bayreuth, where between 1954 and 1970 her Wagnerian roles included Isolde, Sieglinde, and Brünnhilde.

In 1957 Nilsson made her debut at Covent Garden in London as Brünnhilde in the complete Ring cycle of Richard Wagner (Wagner, Richard), and in 1958 she first appeared at Milan's La Scala in the title role of Giacomo Puccini's Turandot. She made her debut at the Metropolitan Opera in New York City as Isolde in 1959. Her other significant roles included Richard Strauss's Salome and Elektra, Ludwig van Beethoven's Leonore, and Carl Maria von Weber's Rieza.

In 1975 Nilsson appeared in the demanding role of the Dyer's Wife in the first performance in Stockholm of Strauss's Die Frau ohne Schatten, which she repeated in San Francisco in 1980 and New York City in 1981. In 1969 the Austrian government gave her the honorary title of Kammersängerin (“court singer”), and in 1981 the Swedish government issued a postage stamp in her honour. Nilsson retired from performing in 1984.