Taylor's other notable television credits include starring roles on the sitcoms Bosom Buddies (1980–82), The Powers That Be (1992–93) and The Naked Truth (1995–98).

She also appeared as Jill Ollinger on the soap opera All My Children (1981–83), as Peggy Peabody on The L Word (2004–08), and as Ida Silver on Mr. Mercedes (2017–19).

In 2020, she received critical praise and her eighth Primetime Emmy Award nomination for portraying Ellen Kincaid in the Netflix miniseries Hollywood.

Taylor's feature film credits include Romancing the Stone (1984) and its sequel The Jewel of the Nile (1985), Alice (1990), To Die For (1995), One Fine Day (1996), George of the Jungle (1997), The Truman Show (1998), Happy Accidents (2000), Keeping the Faith (2000), Legally Blonde (2001), The Wedding Date (2005), Baby Mama (2008), Gloria Bell (2018), Bill & Ted Face the Music (2020), and The Stand In (2020).

Throughout the 1960s, '70s, and '80s, she appeared in numerous Broadway and off-Broadway productions, including starring roles in Simon Gray's Butley and A. R. Gurney's The Cocktail Hour; for the latter, she was nominated for a Drama Desk award.

Then, encouraged by her acting coach, Stella Adler, Taylor took a role that would make her well known: Tom Hanks' sexy, demanding boss in the 1980s sitcom Bosom Buddies.

Following this was her role as high-powered newspaper editor Camilla Dane on the ABC/NBC sitcom The Naked Truth; Taylor was one of the few cast members to last through the show's entire run through 1998, despite several retoolings.

She won the Primetime Emmy Award for Outstanding Supporting Actress in a Drama Series in 1999; in her acceptance speech, she is remembered for claiming the statue and exclaiming, "Overnight!"

Taylor's movie roles have included Reese Witherspoon's character's tough Harvard law professor in the 2001 comedy Legally Blonde, Tina Fey's character's mother in Baby Mama, The Truman Show, Happy Accidents, Next Stop Wonderland, George of the Jungle, The Wedding Date, How to Make an American Quilt, Romancing the Stone, D.E.B.S., Cop and a Half, and One Fine Day.

[5] The two-act play, originally titled Money, Marbles, and Chalk, starring Taylor as Richards, was first workshopped in May 2010 at The Grand 1894 Opera House in Galveston, Texas.