Merchant is best known for his collaborations with Ricky Gervais and Karl Pilkington, as the co-writer and co-director of the popular British sitcom The Office (2001–2003), co-writer and co-star of Extras (2005–2007) and co-host of The Ricky Gervais Show in its radio, podcast, audiobook and television formats; the radio version won a bronze Sony Award.
He is also known for his voice role as Wheatley in the 2011 video game Portal 2.
Recently, a number of tapes of The Steve Show have been rediscovered and are being distributed on various Merchant fan sites.
where, he recalls, "The first week I did really well. I realised that stand-up was not that easy after all." He also appeared as a contestant on a 1997 episode of the TV game show Blockbusters (Gervais said later that he had called Merchant for an interview simply because it was the first CV handed to him.) Merchant and Gervais hosted a Saturday afternoon radio show together from January through to August 1998, when both of them left XFM as it was bought by the Capital Radio Group.
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They took a break from the radio show in mid-2002 in order to film the second series of The Office, which aired that year; in addition to writing and directing the show, Merchant made a cameo performance in the episode "Charity" as a friend of Gareth Keenan's character known by the name Oggy or Oggmonster.The radio show went off the air indefinitely in January 2004. This was followed in 2005 by a 4th series of the radio show, consisting of six episodes.During 2004, Merchant appeared in a recurring role as a chef on Garth Marenghi's Darkplace and in a cameo on Green Wing, and served as a script associate on the Chris Morris and Charlie Brooker sitcom Nathan Barley. In March 2005, the American version of The Office premiered, with Merchant and Gervais credited as executive producers.In July 2005, following a brief return of the XFM radio show (filling in for Adam and Joe), Gervais and Merchant's new sitcom Extras premiered on BBC2.The series features Merchant in a supporting role as Darren Lamb, the incompetent agent to struggling actor Andy Millman, played by Gervais.