He is the drummer of Tom Petty and the Heartbreakers and he is a former member of the Average White Band, and has recorded and performed with numerous other high-profile acts, including Duran Duran, Stevie Nicks, Christine McVie, Slash, Chaka Khan, Eric Clapton, Bee Gees, Scritti Politti, and Johnny Cash.

Ferrone played with the band Bloodstone, appearing on their 1975 album Riddle of the Sphinx. He then began playing with Brian Auger's band Oblivion Express, which had previously featured drummer Robbie McIntosh. McIntosh later joined the Average White Band, and had just released their first number one album when McIntosh died of a heroin overdose. Ferrone was asked to join AWB in his place, and stayed with them for the next eight years, recording and playing concert tours to support several hit albums, until AWB broke up in 1982.

Since appearing on Chaka Khan's 1978 debut album, he went on to play on most of her following albums of the 80s, many of them with former AWB band member Hamish Stuart. In 1985, Ferrone joined the Saturday Night Live house band. He contributed as session drummer for Duran Duran on the Notorious, Duran Duran, and Thank You albums. He also toured with Duran Duran on the Strange Behaviour tour in support of the Notorious album . He also toured and recorded with Eric Clapton from 1986 to 1992. He played drums for the Alan Parsons rhythm section at Abbey Road Studios for Eric Clapton and others.

He has also appeared on recordings by the Bee Gees, Scritti Politti, Brian May, Anita Baker, George Benson, Jonathan Butler, Bryan Ferry, Climie Fisher, Eric Clapton, Christine McVie, Peter Frampton, Jeff Golub, Rick James, Whitney Houston, Chaka Khan, Freddie King, Tracy Chapman, Pat Metheny, Marcus Miller, Steve Winwood, Michael W. Smith, Morrissey–Mullen, Dick Morrissey, Jeffrey Osborne, Paul Simon, Bernie Worrell and Jaco Pastorius.

Ferrone substituted for Joey Kramer of Aerosmith during pre-production of the band's album Nine Lives while Kramer was grieving the loss of his father.

Ferrone met guitarist Mike Campbell of Tom Petty and the Heartbreakers when the two played a show with George Harrison as part of his Hara and the Hijack band at Royal Albert Hall. He began recording with Tom Petty for the Wildflowers album, released late in 1994, with his first live Heartbreakers gig on 28 February 1995 in Louisville, Kentucky. Ferrone has thoroughly enjoyed his time with the Heartbreakers so far: "Everyone should have an experience like 'The Heartbreakers' in their musical life; creativity, passion, honesty, integrity, and a lot of fun." At this time, Ferrone joined the band to record Unchained from Johnny Cash. Ferrone released a live solo album entitled It Up: Steve Ferrone and Friends Live at La Ve Lee in 2003. In 2007, he played drums on the self-titled debut album from the band The Black and White Years, produced by Jerry Harrison of the Talking Heads.

In 2010, Ferrone played on Slash's first solo album, Slash and joined the Italian band Pooh. He also joined a collaborative project with composer and musician Eric Alexandrakis, guitarist and composer Warren Cuccurullo, and producer and songwriter Anthony J. Resta. Explaining the purpose of that project in a Modern Drummer news release Alexandrakis said, "The four of us decided to create a scoring collective to pursue scoring projects in TV themes, film, and advertising…"

He is a fan of English football club Brighton and Hove Albion (known as "The Seagulls") and can be seen sporting a hat with their badge on it on the video of him drumming with Tom Petty and the Heartbreakers performing at the Super Bowl 42 half time show.

In 2011 Steve started playing with old friends Alan Clarke and Phill Palmer in a band made up of former Dire Straits alumni called The Straits. The band also consisted of Mickey Feat on Bass, Chris White on Saxophones, Jaimie Squire on keys and vocals, and Terrence Reiss on vocals and guitar.