In 1982, Milch wrote a script for Hill Street Blues, which became the episode “Trial by Fury”. This began his career in television. He worked five seasons on Hill Street Blues as executive story editor and then as executive producer. Milch earned two Writers Guild Awards, a Humanitas prize, and a Primetime Emmy Award while working on that show.

Milch created NYPD Blue with Steven Bochco and served as executive producer of that series for seven seasons. He received three Primetime Emmy Awards during his time with the series. Milch co-created the patrol police drama Brooklyn South with Bochco, Bill Clark, and William M. Finkelstein in 1997 while still working on NYPD Blue. After NYPD Blue, Milch created a CBS series called Big Apple.

From 2004 to 2006, Milch produced Deadwood, a dramatic series for HBO. Milch served as creator, writer, and executive producer. The series received critical acclaim and garnered Milch two Primetime Emmy Award nominations for writing and producing. The series ended in 2006 after three seasons. There were plans for two feature-length movies to conclude the series, ultimately resulting in a single film released by HBO in 2019. Actor Ian McShane presented David Milch with the 2006 Outstanding Television Writer Award at the Austin Film Festival.

Milch began production in 2006 on John from Cincinnati, another dramatic series for HBO. The series was canceled after its first season. Initial ratings had been lower than expected but increased steadily. Ratings for the final episode were more than 3 million. In October 2007, HBO renewed its contract with Milch. A pilot was commissioned for Last of the Ninth, “a drama set in the New York Police Department during the 1970s, when the Knapp Commission was formed to ferret out corruption in the force.” Collaborating with Milch on Last of the Ninth was former NYPD Blue writer and friend Bill Clark. In December 2008, The Hollywood Reporter stated that Last of the Ninth would not be picked up by the network.

In January 2010, Milch announced that he was developing a new drama for HBO entitled Luck, based around the culture of horse racing. Michael Mann directed the pilot and Dustin Hoffman was cast in the lead role. HBO picked up the series on July 14, 2010. The series ceased production after three horse deaths on set, having aired one season. Other unrealized projects of Milch’s during the early 2010s included a film adaptation of Quantic Dream’s 2010 video game Heavy Rain, a reunion with NYPD Blue collaborator Steven Bochco on an NBC legal drama, and a series of films and television series for HBO based on the literary works of William Faulkner. In July 2013 HBO announced at the Television Critics Association Press Tour that Milch was developing a new series for the cable network tentatively titled The Money. The show would depict a dynastic New York media family. Irish actor Brendan Gleeson was cast in the lead role as a family patriarch and media mogul. It was announced on March 4, 2014 that HBO had passed on the project.

Milch has stated he has bipolar disorder. He developed a heart condition in the 1990s. During the filming of NYPD Blue, he suffered a heart attack while arguing with actor David Caruso over the script. He was diagnosed with Alzheimer’s disease in 2015 shortly before beginning work on the script for the Deadwood film.

On April 20, 2017, Ian McShane announced that Milch had submitted a script for a two-hour Deadwood movie to HBO. “[A] two-hour movie script has been delivered to HBO. If they don’t deliver [a finished product], blame them.” McShane said that he had spoken to Milch about the script and hoped to soon discuss beginning the film. He also said of the original cast returning that “we’d all love to do it … It would be nice to see all of the old gang again.” Deadwood: The Movie began production in October 2018 and premiered in May 2019. The film received critical acclaim and a nomination for the Primetime Emmy Award for Outstanding Television Movie.