Walter began her acting career on the stage. She won the Clarence Derwent Award in 1963 for Outstanding Debut Broadway Performance in Photo Finish by Peter Ustinov. She soon moved to television, and she played the character Julie Murano on the television series, Love of Life. While appearing on Love of Life from 1962 to 1965, she also acted on many other popular television series, including Naked City, East Side/West Side, Ben Casey, Route 66, The Doctors and the Nurses, The Rogues and The Defenders. Among those series is Walter’s notable role as Lorna Richmond on “The Ordeal of Mrs. Snow” episode of The Alfred Hitchcock Hour which aired on April 14, 1964, and a supporting role as William Shatner’s wife on the short-lived drama For the People (1965).

Walter appeared in the first episode of Flipper, shown in September 1964. Also in 1964, she guest-starred in the episode “How Much for a Prince?” of CBS’s short-lived drama The Reporter. In 1966, she appeared in an episode of The Fugitive entitled “The White Knight”.

Walter was married to Ross Bowman, a former Broadway stage manager and television director, from 1966 to 1978. With him, she has a daughter, Brooke Bowman, who was born in 1972 and is currently an executive for 21st Century Fox Television.

In 1974, Walter co-starred in an episode of Columbo, “Mind Over Mayhem”. She starred on the short-lived series Amy Prentiss, a spinoff of Ironside and had a recurring role on Trapper John, M.D. as Melanie McIntyre, Trapper John’s former wife. In 1983, she had a role on the short-lived NBC primetime soap opera Bare Essence as Ava Marshall. Since then, she has worked most frequently in television and theater, though she did appear in some films including The Flamingo Kid (1984) and the film PCU (1994). In the 1990s, she voiced Fran Sinclair on the ABC comedy Dinosaurs, and appeared on Just Shoot Me! as Eve Gallo, the mother of Maya and the ex-wife of magazine publisher Jack Gallo.

She later married actor Ron Leibman in 1983, they remained married until his death in 2019. They appeared together in Neil Simon’s play Rumors, and portrayed husband and wife in the film Dummy (2003) and on Law & Order (in the episode “House Counsel”). He joined the cast of Archer, voicing her character’s new husband. She describes herself as not religious but “very Jewish in my heart”.

From 2003 to 2006, she appeared in a regular role as the scheming alcoholic socialite matriarch Lucille Bluth on Fox’s critically acclaimed comedy series Arrested Development. In 2005, she received an Emmy nomination for Outstanding Supporting Actress in a Comedy Series for the role. Despite her convincing portrayal of Lucille, she states: “I’m nothing like Lucille. Nothing. My daughter will tell you. I’m really a very nice, boring person.” Despite acclaim from critics, Arrested Development received low ratings and viewership on Fox, which cancelled the series in 2006. It was revived by Netflix for season four in 2013, where it gained huge popularity. Walter reprised her role for season five, premiering in 2018.

Walter played Tabitha Wilson on the first season of 90210, until the character was written off halfway through the season. She also guest-starred on the sitcom Rules of Engagement in the episode titled “Kids”. She guest-starred in an episode of Law & Order: SVU in 2009, and appeared again later on as legal-aid lawyer Petra Gilmartin.

Walter starred as Evangeline Harcourt in the Broadway revival of Anything Goes, which began previews in March 2011 and officially opened on April 7, 2011.

Walter was at the center of a controversy which erupted in May 2018 over harassment she had received from Arrested Development co-star Jeffrey Tambor. During a cast interview with the New York Times, Walter was asked about an on-set incident which Tambor had alluded to several months before. Walter teared up and stated that “in almost 60 years of working, I’ve never had anybody yell at me like that on a set and it’s hard to deal with, but I’m over it now…He never crossed the line on our show, with any, you know, sexual whatever. Verbally, yes, he harassed me, but he did apologize. I have to let it go.” In the following exchange, Walter’s co-stars Jason Bateman, Tony Hale and David Cross were criticized in multiple outlets for appearing to excuse Tambor’s behavior without acknowledging Walter’s experience. Within days all three men had issued apologies to Walter.