2020–2022: Punisher
On February 26, 2020, Bridgers released the single "Garden Song" alongside its music video. In April, the 1975 released the song "Jesus Christ 2005 God Bless America" with Bridgers, ahead of their studio album Notes on a Conditional Form, which features Bridgers on three tracks. She was slated to tour with them in summer 2020 before the tour's cancellation due to the COVID-19 pandemic. On April 9, 2020, Bridgers released "Kyoto" and announced on Instagram that her second album Punisher would be released on June 19, 2020. Bridgers released the album a day earlier than stated, stating: "I'm not [delaying] the record until things go back to 'normal' because I don't think they should. Here it is a little early." The album received widespread positive reviews. In July 2020, Bridgers released the music video for her single "I Know the End". While working on Punisher, Bridgers also produced Christian Lee Hutson's album Beginners, which was released on Anti- Records in May 2020. That September, she played to an all-virtual audience of 4 million at Red Rocks Amphitheatre as part of their Unpaused Concert Series. In October, Bridgers announced the formation of her own label Saddest Factory, an imprint of Dead Oceans.
While awaiting the results of the 2020 United States presidential election on November 3, Bridgers tweeted that she would cover "Iris" by Goo Goo Dolls if then-president Donald Trump lost. The cover, which was recorded as a duet with Maggie Rogers under the name Phoebe & Maggie, was released exclusively on Bridgers' Bandcamp page for one day only on November 13. The song received 28,000 downloads with proceeds going to Stacey Abrams' Fair Fight Action organization to promote fair elections both in the state of Georgia and nationwide. On November 10, Bridgers announced an EP of four reworked tracks from Punisher, entitled Copycat Killer, in collaboration with Rob Moose. Copycat Killer was released digitally on November 20, 2020. On November 23, she released a cover of Merle Haggard's "If We Make It Through December", with proceeds going to LA's Downtown Women's Center.
Bridgers garnered four nominations at the 63rd Annual Grammy Awards for Best New Artist, Best Rock Performance, Best Rock Song and Best Alternative Music Album. In December 2020, she released a music video for the song "Savior Complex", directed by Phoebe Waller-Bridge and starring Paul Mescal. That same month Bridgers also featured on Kid Cudi's track "Lovin Me", on his album Man on the Moon III: The Chosen (2020), and sang backing vocals on two songs by Charlie Hickey.
Bridgers was a musical guest on the eleventh episode of the 46th season of Saturday Night Live, playing "Kyoto" and "I Know the End" and closing the performance by smashing her guitar on a fake stage monitor. On March 9, 2021, Bridgers released a second Spotify Singles session featuring a cover of John Prine's "Summer's End" and a version of "Kyoto" featuring vocals from Jackson Browne. In August 2021 it was announced that Bridgers would appear on The Killers' album Pressure Machine on the track "Runaway Horses", released August 13. That same month, she released a cover of Metallica's 1991 song "Nothing Else Matters"; the song appeared on the cover album The Metallica Blacklist released the following month as one of 12 covers of the song. She also provided background vocals on five tracks from Lorde's third album, Solar Power, released on August 20.
On September 3, 2021, Bridgers embarked on the Reunion Tour, starting in St. Louis, Missouri. She featured on Muna's single "Silk Chiffon", released September 7 on Saddest Factory. She also featured on the song "Atlantis" from Noah Gundersen's album, A Pillar of Salt, released in October 2021. On October 13, Bridgers' version of Bo Burnham's "That Funny Feeling" opened at No. 2 on both the Rock & Alternative Digital Song Sales, and Alternative Digital Song Sales charts.
On November 12, 2021, Bridgers appeared on Taylor Swift's second re-recorded album Red (Taylor's Version) on the track "Nothing New". The song debuted and peaked at No. 43 on the Billboard Hot 100, becoming Bridgers' highest-peaking entry on the chart. On November 30, she released a cover of "Day After Tomorrow" by Tom Waits, continuing her tradition of releasing a cover for the holidays. Proceeds from the release were donated to an organization supporting refugees and human trafficking victims in California. On December 15, 2021, Bridgers appeared on the true crime comedy podcast My Favorite Murder to discuss her "hometown" crime story: the murder of 16-year-old Marissa Mathy-Zvaifler at the Sunshine Theater.
On April 15, 2022, Bridgers released "Sidelines", a song featured on Conversations with Friends, a Hulu adaptation of Sally Rooney's novel of the same name. On July 8, she released a cover of The Carpenters' 1972 single "Goodbye to Love" for the Minions: The Rise of Gru soundtrack, and on July 12 was announced to be featured on a song titled 'Stonecatcher' on Marcus Mumford's new solo album, Self-Titled. In August 2022, it was announced that Bridgers would star in I Saw the TV Glow, an A24 horror film directed by Jane Schoenbrun and produced by Emma Stone and Dave McCary. Bridgers performed as an opening act on multiple shows of the US leg of Taylor Swift's The Eras Tour. On November 18, 2022, she covered the Handsome Family's song "So Much Wine" on her tradition of releasing a cover for the holidays, with proceeds from the single to benefit the Los Angeles LGBT Center. The song was provided with vocals from Andrew Bird, organist Ethan Gruska, guitarist Harrison Whitford and Bridgers' then-partner, actor Paul Mescal. On December 9, 2022, Bridgers appeared on the track "Ghost in the Machine" with SZA, on her second album SOS. The track would give her her first Grammy award, for Best Pop Duo/Group Performance. In the same month, she performed at two of Danny Elfman's concerts of The Nightmare Before Christmas soundtrack, taking the part of Sally.