Kim Jae-won debuted in the 2001 SBS sitcom Honey Honey. In 2002, he picked up the Best New Actor trophy at the MBC Drama Awards for the hit series Romance. That same year, he took home the New Star Award at the SBS Drama Awards for Rival. In 2004, he headlined the romantic comedy movie 100 Days with Mr. Arrogant together with Ha Ji-won. Also in 2004, he starred in the South Korean-Chinese co-production drama Beijing My Love, opposite Chinese actress Sun Feifei. In 2006, he reunited with Ha Ji-won in the KBS sageuk drama Hwang Jini. In 2011, he portrayed the role of a deaf man in the MBC series Can You Hear My Heart. His work in the drama earned him several acting recognitions, including an Excellence Award at the MBC Drama Awards. In 2012 and 2013, he bagged back-to-back nominations for the Daesang at the MBC Drama Awards for his performance in May Queen and Scandal: A Shocking and Wrongful Incident. In 2015, he became part of the main cast of the MBC drama Hwajeong. In 2018, he won a Top Excellence Award at the SBS Drama Awards for the series Let Me Introduce Her.

Kim Jae-won enlisted for his mandatory military service on March 23, 2009 and was discharged on January 24, 2011. He married his childhood friend Park Seo-yeon on June 28, 2013. Their son was born in December of the same year.