In 1977, Wells divorced Cecil Womack and returned to performing. She was spotted by CBS Urban president Larkin Arnold in 1978 and offered a contract with the CBS subsidiary Epic Records, which released In and Out of Love in October 1981. The album, which had been recorded in 1979, yielded Wells's biggest hit in years, the funky disco single, "Gigolo".
"Gigolo" became a smash at dance clubs across the country. A six-minute mix hit number 13 on Billboard's Hot Dance/Club Singles chart and number 2 on the Hot Disco Songs chart. A four-minute radio version released to R&B stations in January 1982 achieved a modest showing at number 69. It turned out to be Wells's final chart single.
After the parent album failed to chart or produce successful follow-ups, the Motown-styled These Arms was released, but it flopped and was quickly withdrawn, and Wells's Epic contract fizzled. The album's failure may have been due to light promotion. She still had one more album in her CBS contract, and in 1982, released an album of cover songs, Easy Touch, which aimed for the adult contemporary radio format.
Leaving CBS in 1983, she continued recording for smaller labels, gaining new success as a touring performer.
On the April 21, 1984 edition of American Top 40, Casey Kasem reported that Wells was attempting to establish a hot dog chain.
In 1989, Wells was celebrated with a Pioneer Award from the Rhythm and Blues Foundation during its inaugural year.
In 1990, Wells recorded an album for Ian Levine's Motorcity Records, but her voice began to fail, causing the singer to visit a local hospital. Doctors diagnosed Wells with laryngeal cancer. Treatments for the disease ravaged her voice, forcing her to quit her music career. Since she had no health insurance, her illness wiped out her finances, forcing her to sell her home. As she struggled to continue treatment, old Motown friends, including Diana Ross, Mary Wilson, members of the Temptations and Martha Reeves, made donations to support her, along with the help of admirers such as Dionne Warwick, Rod Stewart, Bruce Springsteen, Aretha Franklin and Bonnie Raitt. That same year, a benefit concert was held by fellow fan and Detroit R&B singer Anita Baker. Wells was also given a tribute by friends such as Stevie Wonder and Little Richard on The Joan Rivers Show.