After studying at New York's Neighborhood Playhouse in the 1970s, she made her professional acting debut in the Western comedy film Goin' South (1978).

Her other films include A Midsummer Night's Sex Comedy (1982), Cross Creek (1983), Back to the Future Part III (1990), What's Eating Gilbert Grape (1993), Philadelphia (1993), Nixon (1995), The Brave One (2007), Last Vegas (2013), A Walk in the Woods (2015), Book Club (2018), Nightmare Alley (2021), and Book Club: The Next Chapter (2023).

She also became known for playing mothers in a string of comedy films such as Parenthood (1989), Elf (2003), Step Brothers (2008), Four Christmases (2008), The Proposal (2009), Did You Hear About the Morgans?

[1] She subsequently traveled to Dallas at the suggestion of her drama teacher where she successfully auditioned for New York City's Neighborhood Playhouse School of the Theatre.

[6] Steenburgen's break came when she was discovered by Jack Nicholson in the reception room of Paramount Pictures's New York office and was cast as the female lead in his second directorial work, the Western comedy Goin' South (1978).

In Back to the Future Part III (1990), Steenburgen played Clara Clayton, a schoolteacher who falls in love with Doc Brown.

Other performances have been in What's Eating Gilbert Grape (1993), as a woman who is having an affair with the title character; My Summer Story (1994), as the mother of Ralphie Parker (the sequel to A Christmas Story); the role of Hannah Milhous Nixon in the Oliver Stone biopic Nixon (1995); and the Will Ferrell comedy Elf (2003), as a woman who discovers that her husband is the father of one of Santa's elves.

In 2018, Steenburgen starred with Diane Keaton, Jane Fonda and Candice Bergen in the romantic comedy film Book Club.

[8] She appeared in the dark sitcom Wilfred from 2011 through 2013 as Catherine Newman, the title character's eccentric and mentally ill mother.

From 2020 to 2021, she played the role of Maggie Clarke in the NBC musical comedy-drama series Zoey's Extraordinary Playlist for two seasons.

In 2007, Steenburgen underwent minor surgery on her arm, which required a general anaesthetic; shortly thereafter, she began experiencing "music (...) playing in her head day and night".

[23] Since 2014, Steenburgen's son Charlie McDowell has had a running joke at her expense, claiming on numerous occasions on social media that his mother is actress Andie MacDowell.