A second album, Ricochet, released seven months later, was a critical success but a commercial failure. The group now found itself at an impasse over the issue of whether to go electric. During the dispute, Kunkel, who wanted to add an electric guitar to their sound, exited the lineup. He was replaced by Chris Darrow (guitar, fiddle). Ironically, by mid-1968 the group had gone electric, and also added drums to their sound. Their first electric album, Rare Junk, released in June of 1968, was also a commercial failure. The band was barely working, a far cry from their success of a year earlier. The band persevered, however, and released Alive! in May of 1969. The album was another commercial disaster, and the Nitty Gritty Dirt Band closed up shop soon after.

The members scattered for several months, but six months later the group was back for another try; the new lineup included McEuen, Hanna, Fadden, Thompson, and Jim Ibbotson (guitars, accordion, drums, percussion, piano, vocals). They returned to their record company with a demand for control over their recordings and the record company agreed. Bill McEuen became the group's producer as well as its manager. The first result of this new era in the Nitty Gritty Dirt Band's history was Uncle Charlie & His Dog Teddy, issued in 1970. Rooted tightly in their jug band sound, the album had a country feel but no trace of the vaudeville and novelty numbers that had appeared on their earlier records. The album yielded what is the group's best-known single, their cover of Jerry Jeff Walker's "Mr. Bojangles," and suddenly, the band had a following bigger than anything they'd known during their brief bout of success in 1967. Their next album, All The Good Times, released in early 1972, had an even more countrified feel.

By 1972, several rock bands, most notably the Byrds and the Beau Brummels, had gone to Nashville seeking credibility from the country music community there, only to be received poorly by that community and to have their resulting work ignored by the press and public. At the suggestion of manager Bill McEuen, however, the Nitty Gritty Dirt Band went to Nashville in 1972 and recorded a selection of traditional country numbers with the likes of Roy Acuff, Earl Scruggs, Mother Maybelle Carter, and other members of country and bluegrass music's veteran elite. Some of the veteran Nashville stars were skeptical and suspicious at first of the bandmembers and their amplified instruments, but the ice was broken when they saw how respectful the band was toward them and their work, and their music, as well as how serious they were about their own music. The resulting triple album, Will the Circle Be Unbroken, released in January of 1973, became a million-seller and elicited positive reviews from both the rock and country music press. The band had, by now, eclipsed the competition as a "crossover" act, reaching country and bluegrass audiences even as their rock listeners acquired a new appreciation for musicians such as Acuff and Carter. The Nitty Gritty Dirt Band succeeded with Will the Circle Be Unbroken because they were willing to meet country and bluegrass music on the terms of those two branches of traditional music, rather than as rock musicians.

During the year and a half that followed the success of Will the Circle Be Unbroken, Les Thompson left the group, reducing the Dirt Band to a quartet. Their next album, Stars & Stripes Forever, issued in the summer of 1974, was a peculiar live album, mixing concert performances and dialogue. Following one more original album, Dream (1975), the group received its first retrospective treatment, a triple-LP compilation entitled Dirt, Silver & Gold, issued late in 1976. Jim Ibbotson left the lineup at around this time, and was replaced initially by session player Bob Carpenter. The remaining trio of Jeff Hanna, John McEuen, and Jimmie Fadden shortened the band's official name to the Dirt Band. In this incarnation, the group became a much more mainstream, pop/rock outfit with a smoother sound, with Jeff Hanna guiding them as producer. Their records were far less eccentric, although they continued to be popular. The band's next albums were decidedly more laid-back than previous records, and didn't attract nearly as much attention. An American Dream, released in 1980, did relatively well, as did Make a Little Magic (1981). By 1982, however, they were back to their country roots, renamed the Nitty Gritty Dirt Band, and Jim Ibbotson was playing with them again. Let's Go, released in the middle of 1983, heralded their return to country music, as a largely acoustic band. In 1984, after 17 years with Liberty/UA/Capitol, they switched labels to Warner Bros., and that same year made some headlines as the first American rock band to tour the Soviet Union. Their Warner albums sold well, but by the end of the 1980s the group was moving between labels.

In 1989, both as a reflection of the changing times, and as though to make sure that everyone got the point that the band was once again mining its country roots, they made Will the Circle Be Unbroken, Vol. 2 for MCA/Universal Records, reuniting with surviving country and bluegrass veterans from the original album and adding a whole roster of new players, including Johnny Cash, Chris Hillman, and Ricky Skaggs. This album won the Grammy for Best Country Vocal Performance (duo or group) and the Country Music Association's Album of the Year Award in 1989. By this time, the Dirt Band was working in their field alongside any number of country/bluegrass crossover artists whose career paths were made easier by that first record, including John Hiatt, Mary Chapin Carpenter, and Rosanne Cash. Their next several albums saw them never veering very far from their country/bluegrass roots. The group continued to record a new album every year or so, including a concert album, Live Two Five, celebrating their 25th anniversary as a band, and the self-explanatory Acoustic. In 1999, they returned with Bang Bang Bang. It was followed by the third installment of the Will the Circle Be Unbroken trilogy in 2002 and an album of all new material, Welcome to Woody Creek, in 2004. Ibbotson left after the record and tour, having had enough of the road. NGDB celebrated their 43rd anniversary with the stellar Speed of Life issued by Sugar Hill, recorded live in the studio with a few of Nashville's finest providing instrumental and vocal help, and the production assistance of George Massenburg and Jon Randall Stewart.