She met the other members of the group, which over time included Rob Sitch, Santo Cilauro, Tony Martin, Mick Molloy, and Judith Lucy amongst others, whilst working on Melbourne commercial radio on the "D-Generation Breakfast Show". The group stayed together to later write, direct and produce "The Late Show", a comedy sketch show, and "Frontline", a widely-acclaimed spoof of television current affairs in which Kennedy played an ambitious reporter.
Since the mid-1990s Kennedy has mostly stayed behind the camera as a producer for various Working Dog productions, including their panel talk show "The Panel", and the movies The Castle and The Dish.
Kennedy is believed to live with Sitch in Melbourne. The pair have never commented publicly on their relationship.