Ironically, Hamilton almost didn't get cast in her best-known role, despite having played the Wicked Witch in a Cleveland stage version of "The Wizard of Oz". Producer Mervyn LeRoy had originally wanted Gale Sondergaard for the part but her makeup and costume tests made her look too glamorous. Relenting, LeRoy offered the role to Hamilton, who in turn demanded a guarantee of six weeks work. After being cast, the actress was nearly burned in an onset accident when the Witch was supposed to disappear in a flash fire and the stage trap door did not open quickly enough, causing her costume to catch fire. Also, Hamilton disdained the dual role because she had a total of just over ten minutes of screen time. The initial reviews seemed to justify her feelings; she was barely mentioned and the film proved to be somewhat of a box office disappointment in its initial release. It took the annual TV airings begun in the 1950s for her to be fully appreciated. Scores of children were terrified by the Witch and Hamilton was assured of a place in the hearts and nightmares of many.
In other films, the actress was often cast as unsmiling spinsters, prim maiden aunts, snooping neighbor ladies and other generally unpleasant or overbearing women. Some memorable roles were an uptight gossip who despises Mae West in "My Little Chickadee" (1940), an old maid in "George White's Scandals" (1945), the house maid of a political boss in Frank Capra's "State of the Union" (1948), and a volatile old widow in Robert Altman's "Brewster McCloud" (1971).
Hamilton also kept her stage career active, taking parts in repertory and regional theaters, appearing in Lincoln Center productions of "Oklahoma!" and "Show Boat" and in the mid-1970s toured as Madame Armfeldt "A Little Night Music", delivering a standout interpretation of her one major musical moment, the lovely waltz "Liaisons". She also frequently performed a one-woman show entitled "Aprons I Have Worn" in which she offered key lines from her screen roles. A pioneer of early television, she made her small screen debut on the anthology series "Silver Theater" in the late 40s and went on to a regular stint on NBC's "The Paul Winchell-Jerry Mahoney Show" during the 1953-54 season. In the 60s and 70s, Hamilton had recurring parts on ABC sitcoms like "The Patty Duke Show" and "The Addams Family" and the NBC children's program "Sigmund and the Sea Monsters". One of her best late-in-life roles was the college professor with a knowledge of the occult (and the spinster-esque name of Hester Crabwell) in the TV-movie "The Night Strangler" (ABC, 1973). Around the same time, she embodied the helpful, sweet New England storekeeper Cora in a long-running series of commercials for Maxwell House Coffee. Hamilton continued to act until about two years before her 1985 death from a heart attack.