She portrayed a cellist named Madeline in Electric Dreams (1984), the first film was released by Virgin Films Production Company. She was cast as Princess Irulan in David Lynch's science fiction epic Dune (1984). In 1986, she starred as Boris' (Vincent Spano) romantic interest Barbara in the film Creator, which also starred Peter O'Toole.
Madsen first became popular with audiences in 1986 with her portrayal of a Catholic school girl who fell in love with a boy from a prison camp in Duncan Gibbons' Fire with Fire. As beauty queen Dixie Lee Boxx, she was the love interest of minor league baseball manager Cecil "Stud" Cantrell (William Petersen) in the HBO original film Long Gone (1987). Also in the same year, she appeared in the music video for "I Found Someone", by Cher. She played Allison Rowe, a secretary in the comedy film Hot to Trot (1988). She also starred as Helen Lyle in the horror film Candyman (1992).