Chilstrom served as pastor of the Faith Lutheran Church in Pelican Rapids, Minnesota, and Augustana Lutheran Church in Elizabeth, Minnesota. In 1962 he became a professor of religion and academic dean at Luther College, Teaneck, New Jersey. He held that position for eight years before accepting a call to be senior pastor of First Lutheran Church, St. Peter, Minnesota, in 1970. In 1976, Chilstrom became bishop of the Minnesota Synod.
Chilstrom was the first ELCA presiding bishop, elected to his post at the church's constituting convention in April 1987. He was re-elected to a four-year term at the 1991 ELCA Churchwide Assembly in Orlando, Florida. Chilstrom was the church's chief ecumenical officer and represented the ELCA in several national and international organizations. He served as a vice president of the Lutheran World Federation based in Geneva. He headed a committee for the National Council of Churches who explored special relationships between the NCC, Roman Catholics and evangelicals.
With Lowell O. Erdahl, he is the author of Sexual Fulfillment: For Single and Married, Straight and Gay, Young and Old. His other works include the book Hebrews -- A New and Better Way. He has been a contributor to Faith and Ferment, Augsburg Sermons, and Lutheran Book of Worship Occasional Service Book.