The next two years saw her recording and producing her fourth album A Night of Carols, also featuring the Australian Girls Choir, and travelling to the U.S. for the recording of Moonglow, her fifth album and first world-wide release, produced by acclaimed audio engineer and renowned audio manufacturer David Manley on all-valve, high-end equipment with the support of many Los Angeles’ notable musicians.

During 1997 Karen wrote and performed a new musical composition at the Aboriginal Reconciliation Convention, highlight of the important national campaign aimed at uniting Australia's white and indigenous communities. She also promoted Reconciliation Day throughout her appearances on community service announcements and television programmes such as McFeast. The next year, together with former Australian Prime Ministers Malcolm Fraser and Gough Whitlam, Wimbledon tennis legend Evonne Cawley, business icon Dick Smith and other eminent Australians, Karen was appointed as one of the Inaugural Ambassadors for Reconciliation by the Reconciliation Council. During the same year, she was also nominated for an Australian Humanitarian Award for her Services to the Arts.

In 1999 she acted as joint executive producer for the program Christmas In Concert with Karen Knowles broadcast throughout Queensland on the Seven Network with top ratings. Segments have since been sold and aired on the Disney Channel with the full program now available on video. In 2000 Karen recorded and released her latest album By Request which features many of the most requested songs at her live performances.

Parallel to her recording career, Karen has always maintained an extensive national and international live schedule with performances at the Australian Olympic Committee Dinner, Australian Tourism Awards, ABM Top 500 Business People of the Year Awards, Tokyo's Australian Society Ball, Expo `90 Osaka, corporate conventions for Mercedes Benz, UTAG and AMP, guest appearances with Australia’s leading Symphony and Philharmonic Orchestras and solo concerts at all major Arts Centres.

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