In early 2011, Reilly collaborated with director Miguel Arteta for a second time with the comedy Cedar Rapids, starring Ed Helms. New York Daily News critic Elizabeth Weizxman considered Reilly a stand out in the film and he received an Independent Spirit Award for Best Supporting Male nomination. Reilly co-starred alongside Ezra Miller and Oscar-winner Tilda Swinton in the British-American drama We Need to Talk About Kevin, based on the novel by Lionel Shriver. His character in the film was Franklin, the father of the troubled Kevin; his performance was described as being "heartbreakingly sweet" by Slate critic Dana Stevens. Next, he co-starred in the comedy-drama Terri alongside Jacob Wysocki, playing a school principal who takes an interest in a teenage misfit. His last release of 2011 was Roman Polanski's black comedy-drama Carnage, which takes place mostly in a single apartment. It also starred Oscar-winners Jodie Foster as his wife, and Kate Winslet and Christoph Waltz as another married couple who engage in a conflict after their children get into a fight. Reilly was approached to appear in a production of the play it was based on, God of Carnage, but he couldn't fit it into his schedule and remarked "I think I've spent enough time in that apartment".
In 2011, he recorded songs produced by Jack White and released as two singles by White's Third Man Records. The first single features two The Delmore Brothers songs: "Gonna Lay Down My Old Guitar" and "Lonesome Yodel Blues #2", both performed with Tom Brosseau. The second single features Ray Price's "I'll Be There If You Ever Want" as well as the country classic "I'm Making Plans", performed with Becky Stark. He also appeared as "future Mike D" in the Beastie Boys' video "Make Some Noise." In 2012, his current band, John Reilly & Friends, was slated to perform in the Railroad Revival Tour, alongside Willie Nelson & Family, Band of Horses and Jamey Johnson. However, the event was cancelled.