During the summer of 1963, Costle worked with the U.S. Department of Justice and the FBI in Mississippi, photographing public records and interviewing witnesses in the early legal actions against the literacy tests used to disenfranchise blacks in the American South.

In 1967, he was associate attorney for the law firm of Kelso, Cotton, Seligman and Ray in San Francisco, and from 1968 to 1969 was a senior associate at the San Francisco urban planning firm Marshall, Kaplan, Gans and Kahn.

In 1977, U.S. President Jimmy Carter appointed Costle as Administrator of the Environmental Protection Agency, a position in which he served until 1981.

With Vermont Governor Madeleine Kunin and George Hamilton, he helped to found the Institute for Sustainable Communities in 1991, a non-profit organization which builds environmental, economic and social infrastructure in existing and emerging democracies around the world.

Costle vied for Vermont's Democratic Party nomination to the United States Senate in 1994, losing in a primary to Jan Backus.