The Collaborative International Dictionary of English v.0.48:

Ham \Ham\ (h[a^]m), v. i. (Theater)
   To act with exaggerated voice and gestures; to overact.
   [PJC]

   ham it up to act in a showy fashion or to act so as to
      attract attention; to ham. [Colloq.]
      [PJC]

WordNet (r) 3.0 (2006):

ham it up
    v 1: exaggerate one's acting [syn: overact, ham it up,
         ham, overplay] [ant: underact, underplay]