Baxter began her career playing girlfriends, sisters and wives while everyone around her seemed to be doing the real comedy and the real acting. She was Lee H. Montgomery's caring sister in the feature "Ben" (1972) and the anxious Debbie Sloan, wife of a Watergate felon, in "All the President's Men" (1976). In her early TV career, Baxter was also rarely given a chance to "act." In "Bridget Loves Bernie", her first series, she was the Catholic ingenue wife of a Jewish man whose families battled the religion issue. The show ran one season from 1972-73, setting off a whirl of controversy, particularly from angered Jewish groups. All Baxter really got from it was the marriage to Birney (who, as a footnote, was not Jewish in real life). She also made her first TV-movie during this period, the frothy, "The Cat Creature" (ABC, 1973). Baxter finally got a chance to show her talent in "Family," (ABC, 1976-80), in which she played Nancy Lawrence Maitland, the eldest child, a single mother living in the guest house while she went to law school. She was the girl who was a cheerleader in high school, the girl who had it all suddenly finding she had to build an adult life on realities, not aura. Critics began to take notice, as did the audience, which fell in love with Baxter. The popularity landed her the role of Meg March in the 1978 NBC miniseries, "Little Women" and as the morally flamboyant sister in "Beulah Land" (NBC, 1980). Gary David Goldberg created the character of Elyse Keaton on the NBC sitcom "Family Ties" (1982-89) for Baxter and she was the second cast member (after Tina Yothers) to be signed. While the show was supposed to be about former hippie parents raising conservative kids, the character of the eldest son (played by Michael J Fox) took over in importance and Baxter found herself playing second fiddle.
Baxter turned instead to TV-movies. In 1986, she was the bulimic woman in "Kate's Secret" (NBC), which helped to launch her as a "serious actress". Numerous other longforms followed, including "The Long Journey Home" (CBS, 1987), which she also executive produced and co-starred in with Birney. Her subsequent numerous TV-movie roles included playing a psychopath holding a young boy essentially hostage in "The Kissing Place" (USA, 1990), the murderous wife in "A Woman Scorned: The Betty Broderick Story" (CBS, 1992) and its sequel, a drug addicted wife married to a drug-addicted husband in "Darkness Before Dawn" (NBC, 1993), a member of the Donner Party in "One More Mountain" (ABC, 1994), a woman with breast cancer and a troubled life in "My Breast" (CBS, 1994), which she also produced, and a woman whose lifelong relationship with a friend is pushed to the brink in "Betrayed: A Story of Three Women" (ABC, 1995). In her quest to play diverse roles, Baxter even portrayed a lesbian helping to raise her lover's son in "Other Mothers", a 1993 CBS Schoolbreak Special for which she was nominated for a Daytime Emmy Award.
Baxter has also occasionally appeared on stage in between TV work. She was one of many celebrities who performed A.R. Gurney's "Love Letters" on stage, and also appeared in productions of "Butterflies Are Free" (she had tested for the feature film version, although Goldie Hawn won the part), and "The Country Wife."