He has starred in several Shakespeare plays, including Hamlet (1972), The Tempest (1974, 2000), Much Ado About Nothing (1976), Trevor Nunn's 1976 Macbeth (television 1978), The Merchant of Venice (1984), and King Lear (2005).

[7] From 1990, McDiarmid and Jonathan Kent served as the artistic directors of the Almeida Theatre in Islington, London, gaining the commitment of prominent actresses such as Glenda Jackson and Claire Bloom for their productions.

In 2002, McDiarmid won Almeida Theatre's Critic's Circle Award for Best Actor for his role as Teddy in a revival of Brian Friel's Faith Healer.

[16] CNN named McDiarmid fourth in their top 10 British villains, stating it was his "darkly seductive voice" that "stole the show", and it was a "masterclass in ruling through fear and manipulation.

From 23 to 26 August 2012, he attended Celebration VI in Orlando, Florida, and had his own show titled The Phantom Menace: Ian McDiarmid, hosted by James Arnold Taylor, in which he talked about his experience working on Star Wars and how he landed the role of Sidious.

McDiarmid also voiced a pig version of Sidious for a promo video on Angry Birds Star Wars II, entitled "Join the Pork Side".

[24] McDiarmid appeared as Darth Sidious in the 2022 TV series Obi-Wan Kenobi, using new scenes and archive material from the prequel trilogy.

[25] McDiarmid took an early role as Mickey Hamilton, a killer intent on avenging the death of his wife and child in The Professionals (Season 2, Episode 13) for London Weekend Television.

In 1990, he starred in the Central Independent Television series Inspector Morse's episode "Masonic Mysteries" as the psychopathic con man Hugo DeVries.

[27] Recently, he played the writer and pioneer of policing, Henry Fielding, in the Channel 4 historical drama series City of Vice and Denis Thatcher in 2009's Margaret.

In 2014, he played a leading role as British Foreign Secretary Sir Edward Grey in the BBC television drama 37 Days, which is about the diplomatic crisis preceding the First World War.