Gibbs' first single release was "Somebody's Knockin'", which was also the title of her debut album. This song was a crossover hit upon its 1981 release, reaching No. 8 on the U.S. country charts, No. 13 on the Billboard Hot 100 and No. 3 on the Adult Contemporary charts. It was followed by "Rich Man", a No. 19 country hit which also entered the pop charts. Her debut album won her the Academy of Country Music's Top New Female Vocalist award. She was also the first winner of the Country Music Association's Horizon Award (which is awarded to emerging artists), and was nominated for a Grammy Award for Best Country Song for "Somebody's Knockin'." Gibbs performed on theGrand Ole Opry as well.

MCA released her second album, I'm a Lady, later in 1981. This album was less successful, although it produced a No. 12 hit in "Mis'ry River," its second and final single. 1982's Some Days It Rains All Night Long produced a Top 20 hit in "Ashes to Ashes" and a No. 45 in its title track. Also in 1981 and 1982, Gibbs toured with George Jones and sang duets with him onstage. Her final MCA album, Over Easy, also produced a minor hit in "Anybody Else's Heart but Mine", and after releasing a compilation called The Best of Terri Gibbs, she left the label.

Gibbs switched to Warner Bros. Records for her fifth album, 1985's Old Friends. All three of this album's singles — "A Few Good Men" (which featured Kathy Mattea on backing vocals) "Rockin' in a Brand New Cradle" and "Someone Must Be Missing You Tonight" — missed the country Top 40.

Gibbs later shifted her focus to Contemporary Christian music, recording Turn Around and Comfort the People in 1987 and 1988, respectively, on Canaan Records. The former gave Gibbs her second Grammy nomination. What a Great Day, her third Christian album, followed in 1990 on the Morning Gate label.