His career progressed with the political satire Election (1999), for which he received a nomination for the Academy Award for Best Adapted Screenplay, and the comedy-drama About Schmidt (2002).

In the 1960s, Payne's father received a Super 8mm projector from Kraft Foods as a loyalty reward,[1][15] and eventually passed it on to his son when Alexander was about 14 years old.

[7] Payne has said he sees his talent as being one of learned economy, referring to the essay written by Tennessee Williams on The Catastrophe of Success.

In Janet Maslin of The New York Times review she wrote, "There's no easy way out of this predicament, though Mr. Payne does beg the question with skill.

In 2002, Payne's film About Schmidt, about a recently retired widower who embarks on a journey to his estranged daughter's wedding, was released.

The film starred Jack Nicholson as the title character, Warren Schmidt, and its script was based on the novel of the same name by Louis Begley.

In 2004, Payne followed About Schmidt with Sideways, a film about two middle-aged men who embark on a week-long road trip to Santa Barbara County wine country to celebrate Jack's upcoming wedding.

The film starred George Clooney, Shailene Woodley, Beau Bridges, Judy Greer, Matthew Lillard, and Robert Forster.

Peter Bradshaw of The Guardian praised Payne as a director writing, "Payne knows the difference between lightness and frivolity, between seriousness and solemnity, between different kinds of cloud...Within a single scene the film can tap into deep feelings of pain, switch into comic modes as various as farce and satire, and confront and evade moral challenges.

[27] The film received critical acclaim with David Edlestein of NPR describing it as a "superb balancing act" and adding, "it's a special kind of triumph".

The film, about an impoverished married couple who decide the way ahead lies in shrinking themselves, was to star Paul Giamatti and Reese Witherspoon, but was superseded by The Descendants and Nebraska.

[39] Stephen Farber of The Hollywood Reporter hailed it as "an engaging and often touching comic drama that builds power as it moves toward its immensely satisfying conclusion.

[47] In 2000, it was reported that Payne was to co-write and direct an untitled film inspired by Oscar Wilde's The Picture of Dorian Gray.

[48] At one point, Payne was in talks to direct the remake of the 1966 heist comedy Gambit, after the Coen brothers did a rewrite of the film in 2003.

He planned to reunite with Reese Witherspoon for the project, but he ultimately decided against it, reluctant to direct a script he didn't write.

[61][62][63] The project was to have been based on a New Yorker article written by Ruth Prawer Jhabvala about an elderly judge from Delhi who wants to make sure his much younger wife will be taken care of after his death.

[72] In April 2015, it was reported that Payne was interested in directing Septillion to One, a contemporary romantic comedy inspired by the true story of Joan Ginther, who won the Texas State Lottery four times.

[73][74][75][76] Adam R. Perlman and Graham Sack's spec script was purchased by OddLot Entertainment, who intended to produce and finance the film.

[77][78][79] In February 2016, it was announced that Payne was to direct a film titled My Saga, which is based on a pair of articles written by Karl Ove Knausgård and published by The New York Times Magazine.

It was reported in February 2019 that Payne was attached to direct the comedy horror film The Menu for Gary Sanchez Productions.

[97] The plot concerns a young couple that attends an exclusive restaurant in a tropical island only to experience some "shocking surprises.

[104][105] On December 2, 2019, it was announced that Payne was attached to direct an American remake of the 1987 Oscar-winning Danish film Babette's Feast.

[113] In 2021, Payne said that one of his upcoming projects, which he planned to follow The Holdovers, would be a comedy set in Paris based on the true story of rival antique chair dealers, and that he was using the pandemic downtime to craft the screenplay.

[115] On a 2023 episode of Happy Sad Confused, Payne revealed that one of his favorite scripts which had not been produced was a rewrite with Jim Taylor on a film called Tucker Ames as Himself, which he described as "sort of a parody of a Bill Gates guy who gets his comeuppance in some way.

His films sometimes include scenes of historical landmarks, black and white photographs, and museums, and he often uses amateur actors for minor roles.

[128] Payne was co-owner (along with friend Ann Beeder) of King Fong (now permanently closed), a Chinese restaurant in Omaha.

[129] Payne is a long-time supporter[130] of the Nebraska Coast Connection, a social networking organization that meets monthly in Culver City, California.

In November 2013, he held a special screening of Nebraska for the group's members at the Sherry Lansing Theatre on the Paramount Studios lot.

[131] In a 2018 interview with Ronan Farrow, actress Rose McGowan accused a "prominent” man in Hollywood of statutory rape but she did not name the person in question.

[133] Payne responded to McGowan's allegation by writing a guest column in Deadline Hollywood in which he admitted to a consensual relationship with her, stating that they had met at some point in 1991 (McGowan turned 18 in September 1991) at an audition for a comic short film that he was directing for the Playboy Channel and had no reason to believe she was under the age of consent as the part required an actress who was of age.