Born in Framingham, Massachusetts, Colabello grew up in Rimini, Italy. His mother, Silvanna, was born in Rimini, and his father, Lou, played baseball in Italy for seven years, later pitching in the 1984 Olympics. The family moved back to Massachusetts in 1991. Colabello graduated from Milford High School in Milford, Massachusetts. He then attended NCAA Division II Assumption College, but was not drafted by an MLB team.
Prior to joining the Twins organization in 2012, he played seven seasons in the independent Can-Am League for the Worcester Tornadoes (2005–2011) and Nashua Pride (part of 2007).
In 2012, his first season of affiliated baseball, Colabello batted .284 with 19 home runs and 98 runs batted in (RBI) for the New Britain Rock Cats of the Double-A Eastern League. He started the 2013 season with the Rochester Red Wings of the Triple-A International League, hitting .358 with 12 home runs in 46 games before being promoted to Minnesota.
On May 22, 2013, the Twins promoted Colabello to the major leagues and he made his debut that day. He was called up after Trevor Plouffe suffered a concussion and was placed on the 7-day disabled list. Colabello went 1-for-11 and was optioned on May 29. He was called back up on May 30 after a strained left calf forced Plouffe to the 15-day disabled list. Colabello was named the International League Most Valuable Player at the end of the minor league season, as well as the Rookie of the Year.
After his 2013 season, Colabello garnered significant interest from several teams in the Korea Baseball Organization, including a reported $1 million contract offer from the LG Twins (with a similar $1 million buyout going to the Minnesota Twins). On December 21, Colabello announced that he would not pursue the opportunity to play overseas, saying "Going to Korea would mean giving up the dream of being a big-leaguer".
Colabello played for the Italy National Team in the 2013 World Baseball Classic. He appeared in all 5 games that Italy participated in, going 6-for-18 (.333) with 2 HR and 7 RBI.
In 2014, Colabello made the Twins starting lineup out of the gate, rotating between outfield, first base, and designated hitter. He had a dazzling start to the season, batting .308 with 3 home runs, and 27 RBIs through his first 23 games.
On April 26, Colabello surpassed Hall of Famer Kirby Puckett's Twins franchise record of 26 RBIs in the month of April. It was a club record that stood for 20 years.
His hot start soon cooled off, as Colabello hit .125 in May and was sent down to the minors by the end of the month. He was recalled by the Twins for July and early August, but did not regain his batting stroke, finishing the season at .229.
On December 8, 2014, Colabello was claimed off waivers by the Toronto Blue Jays. They designated him for assignment on February 4, 2015, and he was outrighted to the Triple-A Buffalo Bisons on February 11. Colabello batted .337 with 5 home runs and 18 RBI in April 2015, and was named the International League Player of the Month. On May 5, Colabello's contract was purchased by the Blue Jays. In his second game with the Blue Jays, Colabello recorded his first career four-hit game. On May 29, Colabello played his first game against his former team, the Minnesota Twins. In the ninth inning, he hit a tiebreaking two-run home run off closer Glen Perkins to help the Blue Jays win 6–4. Colabello continued his excellent batting on June 7, when he helped the Blue Jays sweep the Houston Astros by hitting a walk-off two-run single. With the hit, he also extended his career-high hitting streak to 17 games. He hit his first career triple on October 2.
Colabello finished the 2015 regular season with career-highs in nearly every statistical category, including batting average (.321), hits (107), home runs (15), RBI (54), and on-base plus slugging (.886). He hit a solo home run in Game 5 of the 2015 American League Championship Series, which helped the Blue Jays top the Kansas City Royals on October 21 and force a Game 6.
On April 22, 2016, Colabello was suspended 80 games without pay for testing positive on performance enhancing drugs on March 13. At the time of his suspension, he was hitting .069 (2-for-29) in 10 games. In response to the suspension, Colabello released the following statement:
On March 13, I got one of the scariest and most definitely the least expected calls of my entire life. I was informed by the Players Association that a banned substance was found in my urine. I have spent every waking moment since that day trying to find an answer as to why or how? The only thing I know is that I would never compromise the integrity of the game of baseball. I love this game too much! I care too deeply about it. I am saddened more for the impact this will have on my teammates, the organization and the fans of the Toronto Blue Jays. I hope that before anyone passes judgement on me they can take a look at the man that I am, and everything that I have done to get to where I am in my career.
On July 13, Colabello was assigned to the Advanced-A Dunedin Blue Jays for a rehab assignment. After rehab, he was assigned to the Triple-A Buffalo Bisons for the remainder of the 2016 season. In 40 games with the Bisons, Colabello hit .180 with five home runs and 11 RBI. On November 22, it was announced that Colabello would play for Italy at the 2017 World Baseball Classic. On December 2, 2016, Colabello was outrighted to Triple-A Buffalo after clearing waivers. He elected free agency on December 6.
On December 20, 2016, Colabello signed a minor league contract with the Cleveland Indians that included an invitation to spring training. During spring training, Colabello played in the 2017 World Baseball Classic, appearing at first base in all 4 games in which Italy participated. He went 2-for-13 (.154), with 1 HR and 2 RBI.
Colabello did not make the Indians major league roster, and was assigned to Triple-A. He was released on July 8, 2017, after hitting .225 in 72 games for the Triple-A Columbus Clippers.
Colabello signed a minor league contract with the Milwaukee Brewers on July 18, 2017. He was assigned to the Triple-A Colorado Springs Sky Sox. He hit .301 in 44 games for the Sky Sox, but was not placed on the big league roster when teams expanded to 40 players in September.