Walters began his career as an apprentice at Aston Villa on leaving school in the summer of 1980, turning the professional a year later – just after Villa's Football League First Division title triumph – and made his competitive debut on 28 April 1982 in a 4–1 league defeat at home to Leeds United, two months after the departure of manager Ron Saunders – who had given Walters his first professional contract – and the promotion of assistant Tony Barton to the manager's seat.

On the opening day of the 1985-86 season Aston Villa were soundly beaten 4-0 by Manchester United prompting Walters to suggest to Graham Turner that he takes up a free role in the upcoming second game against Champions Liverpool.

The move was initially a great success and Walters scored what he thought would be the winner, only for Jan Molby to equalise late on in a credible 2-2 draw.

Walters, now highly rated as one of the country's most promising young players, remained in favour under Graham_Turner, but Villa were in deep trouble throughout the 1985–86 season, finishing 16th and only avoiding relegation thanks to a late run of good form.

Liverpool paid £1.25 million for Walters' services and he made his debut four days after signing, when he came on as a 65th-minute substitute for Steve McMahon in a 2–1 league win over Oldham Athletic at Anfield on 17 August 1991.

Liverpool trailed 2–0 from the away leg but won their home match 3–0 with Walters netting a late winner after tormenting the French defence all night long.

He remained a regular in the side and helped Liverpool to the 1992 FA Cup Final, although he was an unused substitute as his teammates beat 2nd Division Sunderland 2–0.

When Liverpool beat Bolton Wanderers 2–1 in the 1995 League Cup final, again an unused substitute, Walters was being used less as Roy Evans was employing three centre-halves with Rob Jones and Stig Inge Bjørnebye as wing-backs and three midfielders – Steve McManaman, Jamie Redknapp and John Barnes.

His final appearance was in a dreadful match away to Queens Park Rangers, which Saints lost 3–0 meekly surrendering in a shoddy second half.

Walters joined Swindon Town on a free on 31 July 1996 and made his debut on 17 August in the 2–0 defeat to Norwich City at Carrow Road.

[10] He never really featured in manager Jimmy Quinn's plans, and was eventually released to Bristol Rovers on a free transfer during the administration period, when it was decided Town could no longer afford his wages.

[14] Walters was born in Birmingham to the Nigerian footballer Lawrence Wabara, and a Jamaican mother who moved to England as part of the Windrush generation.

[15] Walters is the half-brother of the professional boxer Pelé Reid,[16] and the uncle of fellow footballers Simon Ford,[17] and Reece Wabara.