Kennedy defeated Funaki once again in his SmackDown! debut on August 25, 2005. Kennedy also created an ongoing mini-feud with SmackDown! ring announcer Tony Chimel, based on Kennedy believing that Chimel's announcing was not done well enough or with sufficient respect, and therefore performing his own introductions or forcing Chimel to introduce him again. Kennedy's self-ring introductions before the match became one of his trademarks. While working on both Velocity and SmackDown!, he was also still working in OVW. Kennedy made his pay-per-view debut at SmackDown!'s No Mercy, defeating Hardcore Holly and injuring Holly's ribs during the match.
On the November 11 episode of SmackDown!, Kennedy faced Eddie Guerrero to compete for a spot on SmackDown!'s Survivor Series team. He lost the match when Guerrero tossed him a steel chair and played possum, a move which Guerrero had made famous. The groggy referee turned around and saw Guerrero on the ground with Kennedy holding the chair, and consequently disqualified Kennedy, awarding the place on Team SmackDown! to Guerrero. This was Kennedy's first loss. In retaliation, Kennedy struck Guerrero over the head with the chair after the match. This was Guerrero's final televised match, as he died on November 13 in his hotel room in Minneapolis, Minnesota. In interviews about the incident, Kennedy has stated that he considers this an "unfortunate honor".
In December 2005, Kennedy participated in WWE's "overseas" tour. On the second day in Italy, Kennedy suffered a serious latissimus dorsi tear. Even after surgery in December, Kennedy was still forced out of the ring for nearly six months while he rehabilitated the legitimate injury. He continued to make appearances on SmackDown! and Velocity throughout January and February, making his ring announcement and commentating specific matches as a representative of The Network. He even made an appearance on the January 11 episode of WWE Byte This! with Todd Grisham to maintain visibility.
At the OVW tapings on May 10, Kennedy returned to in-ring action facing the OVW Heavyweight Champion, CM Punk, in a title match that Kennedy was unable to win. Kennedy made his return to SmackDown! on the June 9 episode with a victory over Scotty 2 Hotty after using the Kenton Bomb. On the July 14 episode of SmackDown!, Matt Hardy used a roll-up to defeat Kennedy, ending Kennedy's streak of never being defeated by pin or submission. On the July 21 episode of SmackDown!, Batista put out an open challenge to find an opponent for The Great American Bash, as his original opponent, Mark Henry, had been injured. Kennedy accepted the challenge and won the match by disqualification, however, he suffered a severe injury during the match after being thrown headfirst into the steel steps, resulting in an exposed cranium laceration which required twenty stitches to close. He then entered into a short feud with Batista, defeating him by countout in their second match, but losing via pinfall in the third. Kennedy helped The McMahons (Vince and Shane) in their feud with D-Generation X (DX), appearing at both SummerSlam and the August 28 episode of Raw to attack DX.On the September 1 episode of SmackDown!, Kennedy defeated Finlay and Bobby Lashley in a Triple Threat match to win the WWE United States Championship, his first and only title reign in WWE. On the September 8 episode of SmackDown!, Kennedy announced that he wanted to move over to Raw, as SmackDown! did not interest him anymore because he had already defeated every top performer on the roster. This led to SmackDown! General Manager Theodore Long making a match between Kennedy and The Undertaker, who Kennedy had never faced, to be held at No Mercy. Kennedy won the match by disqualification. On the October 13 episode of SmackDown!, Kennedy, now with a win over The Undertaker, again stated his desire to move to the Raw brand. However, Long put him against an opponent who he had never faced—this time Chris Benoit—with Kennedy's title on the line. Long said that, if Kennedy were to defeat Benoit, he would be given his release and be allowed to go to Raw. Kennedy lost the United States Championship to Benoit after a distraction from the Undertaker. Kennedy tapped out to the Crippler Crossface, marking his first submission loss.
In November 2006, Kennedy joined forces with Montel Vontavious Porter (MVP) in matches against the Brothers of Destruction (Undertaker and Kane) in various combinations. On a November episode of SmackDown!, Kennedy and MVP lost to the Brothers of Destruction three times. After first getting counted out, Theodore Long restarted the match with no countouts. When they disqualified themselves following a low blow by Kennedy, Long restarted the match again with no countouts and no disqualifications. Kennedy and MVP continued to feud with the brothers, with MVP feuding with Kane while Kennedy challenged the Undertaker to a match at Survivor Series, which was later announced as a First Blood match. Kennedy won the match after MVP turned on him and aimed for his head with a steel chair, but missed and hit the Undertaker instead, leaving him busted open. After the match, the Undertaker attacked Kennedy, forcing him to bleed. At Armageddon, Kennedy and the Undertaker met in a final match; they were scheduled in a Last Ride match. In the match, the Undertaker defeated Kennedy.
After a brief hiatus, Kennedy returned to SmackDown! on January 5 and defeated Chris Benoit in a "Beat the Clock" match, with the overall prize being a shot at Batista's World Heavyweight Championship at the Royal Rumble. After he prevented The Undertaker from beating his time, Kennedy's time of 5:07 ended up being the fastest. At the Royal Rumble, he lost the match, as well as a subsequent rematch. From there, Kennedy began a short feud with ECW World Champion Bobby Lashley, leading to a match at No Way Out for the title which Kennedy won by disqualification. Kennedy challenged Lashley unsuccessfully on ECW and SmackDown! as well.
Kennedy earned a spot in the 2007 Money in the Bank ladder match by defeating Sabu in an Extreme Rules match in a February episode of ECW. At WrestleMania 23, Kennedy won the Money in the Bank ladder match, giving him the right to challenge any World Champion in WWE at any date up until WrestleMania XXIV. Kennedy announced on the April 30 episode of Raw that he would be cashing in his Money in the Bank championship opportunity at WrestleMania XXIV. On the May 7 episode of Raw, Kennedy, however, lost his Money in the Bank opportunity to Edge, losing mere moments after a blow to the head from a monitor before the match began. Because of the injury Kennedy sustained during his match with Edge, it was revealed that his right triceps muscle tore off the bone and he would be out for a minimum of five to seven months. The injury, however, was not as serious, as the triceps tendon did not tear off the bone but was, in fact, a massive hematoma.
On the June 11 episode of Raw, Kennedy was drafted from SmackDown! to Raw as part of the WWE Draft. On the August 20 episode of Raw, Carlito hosted the interview segment Carlito's Cabana. During the segment Carlito challenged his special guest, Umaga for his Intercontinental Championship at SummerSlam, and Kennedy also demanded a shot at the title. Raw General Manager William Regal, scheduled a match between Kennedy and Carlito, in which the winner would receive an opportunity to face off against Umaga at SummerSlam. After the match ended in a draw, Regal booked a Triple Threat match at SummerSlam between the three men for the Intercontinental Championship; at the event, Umaga retained the title. On the September 10 episode of Raw, Mr. McMahon revealed that Kennedy had, in storyline, been suspended for "impersonating a McMahon". This angle was written because Kennedy being named one of the eleven superstars implicated in a steroid scandal and therefore suspended for thirty days in accordance with WWE's Wellness Policy.
After his suspension, Kennedy returned to television on the October 1 episode of Raw, facing John Cena in the main event. At No Mercy in October, Kennedy took part of a six-man tag team match alongside then World Tag Team Champions Lance Cade and Trevor Murdoch defeating then-Intercontinental Champion Jeff Hardy and Paul London and Brian Kendrick. For several weeks, Kennedy began a feud with Jeff Hardy, which consisted of the two facing off in a singles match and numerous tag team matches, most of which Hardy won. At Cyber Sunday, Kennedy and Hardy were two of the eligible wrestlers that could earn a WWE Championship match for that evening, pending the fan's votes. Neither man won the opportunity, as Shawn Michaels won the vote and earned a shot at the title. Although neither won the title shot, Kennedy defeated Hardy in a scheduled match made by William Regal.
Kennedy next entered a feud with Shawn Michaels on the night after Survivor Series. Kennedy claimed that it was time for Michaels to move on and let the younger, talented superstars climb the ladder to success. At Armageddon, Michaels defeated Kennedy after he was able to hit Kennedy with Sweet Chin Music. On the December 31 episode of Raw, Kennedy and Michaels had a rematch where Kennedy pinned Michaels following his new finishing move, the "Mic Check". In subsequent rematches, the two traded wins over each other. At the Royal Rumble, Kennedy eliminated Michaels from the Royal Rumble match, ending the rivalry between the two.
After several months of minor feuds and short storylines, Kennedy was not seen for weeks after WrestleMania XXIV, because he was filming a role for the new movie Behind Enemy Lines: Colombia. Kennedy returned to Raw on April 28, as he confronted and brawled with General Manager and newly crowned King of the Ring William Regal, turning into a crowd favorite in the process. On the May 18 episode of Raw, Kennedy defeated Regal in a "Loser Gets Fired Match" completing the face turn and opening up the General Manager spot on the Raw brand.
During the sixth annual WWE Draft on June 23, 2008 on Raw, Kennedy was drafted from Raw back to the SmackDown brand. On August 4, he dislocated his shoulder in a match against Shelton Benjamin at a house show, sidelining him from active competition. Kennedy made his return to WWE television, in a non-wrestling capacity, on the November 24 episode of Raw, while promoting his film Behind Enemy Lines: Colombia, and also made an appearance on SmackDown on the November 28 episode.On April 15, 2009, Mr. Kennedy returned to the Raw brand as Raw's first pick of the 2009 Supplemental Draft. On May 7, Kennedy returned to in-ring action at Florida Championship Wrestling, WWE's developmental territory, to gain match fitness before returning to Raw. On the May 11, 2009 episode of Raw, WWE aired a video package to promote Kennedy's return. He made his official Raw return on May 25, competing in a 10-man tag team match, which his team won.Kennedy was released from his WWE contract on May 29, 2009, just four days after his return.