After two years at Imperial Studios, Prithviraj grew a little restless. He missed theatre, which led him to join Grant Anderson's theatre company. He toured several cities with the troupe, and while they were performing in Calcutta, Anderson had to call off the tour due to lack of funds. Prithviraj chose to stay back in Calcutta and joined the burgeoning New Theatres studio of B.N. Sircar. He worked on several New Theatres productions and consolidated his stardom with an eclectic range of films such as Rajrani Meera (1933), Debaki Bose's Seeta (1934), Pramathesh Barua's Manzil (1936), Nitin Bose's President (1937) and Dushman (1939). His most notable role from this period was as King Shiva Singha in Debaki Bose's Vidyapati (1937). However, with the rise of bilingual productions, Prithviraj felt he was being sidelined in favour of Bengali actors. Meanwhile, the Bombay film industry was flourishing, and he decided that it was time to return.

His first major success as a freelance actor and star was Sohrab Modi's Sikandar, in which Prithviraj portrayed Alexander the Great. The film became a sensation, and his performance remains iconic. The Indian People's Theatre Association (IPTA) was established in 1943, and like many socially committed actors, directors, and writers of the time, Prithviraj was associated with it. But unlike some believe, he wasn't a founder member. The very next year, he started his own insitution to propragate his own brand of theatre: Prtihvi Theatres.

Deewar was one of Prithvi Theatre's landmark productions that spoke against British imperialism. Since India was still under British rule, a direct anti-British narrative was not possible. Instead, they devised an allegorical plot about two brothers living together in harmony until a British couple arrives and creates conflict between them, eventually leading to the construction of a wall separating their spaces. Alongside Inder Raj Anand, who co-wrote the play, other notable talents associated with Prithvi Theatres at the time included Shankar Jaikishan and Ramanand Sagar, both of whom contributed to this iconic play.

Conceived at the cusp of India's Partition and Independence, his play Pathan was Prithviraj Kapoor's heartfelt appeal for communal harmony. It tells the story of a deep friendship between a Hindu and a Muslim family. Prithviraj plays Sher Khan, a Muslim Pathan who sacrifices his own son so that his Hindu friend's son may live. Raj and Shammi Kapoor alternated in the role of the sacrificed son across different shows. The play was well received and remains one of Prithvi Theatre's most critically acclaimed productions of that era.

In Awara, Prithviraj Kapoor was pitted against his son Raj, who was already deemed a filmmaker and an actor of great possibility. Prithviraj Kapoor's turn as the upright, ambitious and yet hopelessly conservative Judge Raghunath was one of his most layered and complex roles. He deftly showcases the moral depravity of a seemingly upright man when he abandons his wife and refuses to recognise his son. Awara had him sharing the screen with his father Basheshwarnath Kapoor and his sons Raj and Shashi Kapoor.

An adaptation of Bankim Chandra Chattopadhyay's eponymous Bengali novel, Anand Math (1952) portrays the Sanyasi Rebellion, in which Hindu sanyasis of Bengal and Bihar rose in revolt against the British East India Company. Prithviraj Kapoor plays Satyanand, the head of one such group. The film features Lata Mangeshkar's rendition of "Vande Mataram," a song that had its origins in Bankim's novel. The music was composed by Hemant Kumar.

Prithviraj Kapoor served as director at the national film seminar, held at the behest of Jawaharlal Nehru, on the basis of a report by the Film Enquiry Commission (FEC). The seminar put forward several recommendations on training, financing and archiving, in the field of Indian cinema.

Prithviraj Kapoor got to play the role of a lifetime as Mughal emperor Akbar in the 1960 magnum opus Mughal-e-Azam. Prithviraj's stature and voice were a perfect fit for the role. Prithviraj completely surrendered to Asif's vision and his screenplay to breathe life into the role. Legend has it that the role consumed him and for the duration of the shoot, Prithviraj and Akbar were indistinguishable. It was widely acclaimed and remains one of the best performances of Indian cinema.

K. A. Abbas directed Prithviraj Kapoor in a film called Aasman Mahal, written by Inder Raj Anand. He played a Nawab who resists the conversion of his haveli into a hotel. Much like Satyajit Ray's Jalsaghar (The Music Room), the story explored the decadent decline of feudalism. Prithviraj's performance won him an award at the Karlovy Vary Film Festival.

In the same year, he played the noble King Porus (Puru) in Sikandar-e-Azam (1965).

The films that followed included Nanak Naam Jahaz Hai (1969), the Ramsay Brothers' early horror film Ek Nannhi Munni Ladki Thi (1970), and a Kannada film titled Sakshatkara (1971), in which he played the father of superstar Dr. Rajkumar.

After Awara, Prithviraj was once again working with two generations of his family in his grandson Randhir's directorial debut Kal Aaj Aur Kal (1971). In the film, he represents the old order, the orthodox grandparent who refuses to put up with the modern waywardness of his grandson, played by Randhir Kapoor. Raj Kapoor represents the hapless “present”, caught between the past and the future.

Diagnosed with Hodgkin's disease, Prithviraj passed away on May 29, 1972.