Lilburn returned to New Zealand in 1940 and served as guest conductor in Wellington for three months with the NBS String Orchestra. He shifted to Christchurch in 1941 and worked as a freelance composer and teacher until 1947. Between 1946 and 1949 and again in 1951, Lilburn was Composer-in-Residence at the Cambridge Summer Music Schools.
During these years he was heavily involved in New Zealand arts activity, and became friends with other artists such as Allen Curnow, Denis Glover, Rita Angus, and Alistair Campbell.
In 1947, Lilburn shifted to Wellington to take up a position at Victoria University as part-time lecturer in music. He became a full-time lecturer in 1949, senior lecturer in 1955, was appointed Associate Professor of Music in 1963 and Professor with a personal chair in music in 1970. Following visits to studios in Europe and Canada in 1963, Lilburn founded the electronic music studio at the university—the first in Australasia—in 1966 and was its director until 1979, a year before his retirement.