Most of Duff's first few acting roles were small, starting off with an uncredited appearance in Hallmark Entertainment's western miniseries True Women (1997). She also served as an extra, again uncredited, in writer-director Willard Carroll's ensemble dramedy Playing by Heart (1998). Her first major part was as the star of the 1998 film Casper Meets Wendy, playing the young witch, Wendy, who encounters the animated character Casper. Like Casper: A Spirited Beginning (1997), the second sequel to the successful Casper (1995), the film was released direct-to-video with generally unenthusiastic reviews.

Duff later appeared in a supporting role in the television film The Soul Collector (1999), which was based on a Kathleen Kane novel and starred Bruce Greenwood as an angel who helps out a female farmer (Melissa Gilbert) whose husband has recently died. Duff ended up winning a Young Artist Award for "Best Performance in a TV Movie or Pilot (Supporting Young Actress)".

Duff's first serious shot at fame came when she was cast as one of the children in the pilot episode of the NBC sitcom Daddio (2000). Actor Michael Chiklis, co-star of Daddio stated, "After working with her the first day, I remember saying to my wife, 'This young girl is going to be a movie star'. She was completely at ease with herself and comfortable in her own skin".

Lizzie McGuire

Before Daddio had aired, Duff was dropped from its cast lineup and became reluctant to continue her acting career. Her manager and mother spurred her on, and a week later she successfully auditioned for the family comedy show Lizzie McGuire. In the series Duff portrayed a clumsy but average middle school girl. The show focused on her life and her slow growth into teenhood. Actors that starred alongside her included Lalaine, Adam Lamberg, Jake Thomas, Clayton Snyder, Ashlie Brillault, Robert Carradine, and Hallie Todd.

Lizzie McGuire, which first aired on the Disney Channel in January 12, 2001, was a ratings hit, drawing in 2.3 million viewers per episode,[2] and became the career breakthrough Duff had been waiting for. Her participation in the show led to her becoming highly popular among children between the ages of seven and fourteen, with critic Richard Huff of the New York Daily News calling her "a 2002 version of Annette Funicello".[2] After Duff fulfilled her entire sixty-five episode contract with Lizzie McGuire, Disney toyed with the idea of continuing the franchise in further films and a prime-time television series to be broadcast on ABC, but the plans deteriorated. A successful feature film spin-off, The Lizzie McGuire Movie (2003), was then produced.