Steve Tambellini played his junior hockey for the Lethbridge Broncos of the WHL from the 1975–76 season until the 1977–78 season, where he scored 155 goals and notched 181 assists in 193 games. He would earn the Jim Piggott Memorial Trophy as the top rookie in the league for his effort in the 1975–76 season. In the 1978 NHL Entry Draft, Tambellini was chosen 15th overall by the New York Islanders. He would spend two years with New York, winning a Stanley Cup with them in the 1980 season. He was dealt at the trade deadline the next season along with Chico Resch to the Colorado Rockies in exchange for Mike McEwen. He stayed with Colorado for two seasons, including their first season as the New Jersey Devils as the franchise was relocated in 1982. While playing for the New Jersey Devils, Tambellini scored the new team's first ever hat trick on December 3, 1982 in a 5-4 victory over Hartford. After the 1982–83 season, Steve was traded to the Calgary Flames. He would remain there for two seasons before signing on as a free agent with the Vancouver Canucks, where he would round out his NHL career. He would go on to play a minor amount of time in both the Swiss Hockey League and the Austrian Hockey League.
After his retirement from hockey, he was hired by the Canucks as the Director of Public and Media Relations and remained with the franchise until July 2008. In 1997, he would be promoted to Senior Vice President of Hockey Operations. In 1998 his position would change again, this time to the Vice President of Player Personnel. In this position he would oversee player development and professional player scouting, until eventually being named Assistant General Manager to Dave Nonis and to Mike Gillis after Nonis was fired by the Canucks on April 14, 2008. In 2002, he was the Director of Player Personnel for the gold medal winning Canadian Olympic Men's Ice Hockey Team at the 2002 Winter Olympics. He would be rewarded again, being named the Director of Player Personnel for both the 2003 World Junior Ice Hockey Championships as well as the 2004 World Cup of Hockey. In 2004, he was inducted into the British Columbia Hockey Hall of Fame. On July 31, 2008 he was named General Manager of the Edmonton Oilers after the Oilers promoted Kevin Lowe to President of Hockey Operations. On April 13, 2013 he was fired by the Edmonton Oilers, and was replaced by Craig MacTavish. The Anaheim Ducks hired Tambellini as a part-time scout on November 21, 2013.