In addition to his supporting turn in "The Apple Dumpling Gang Rides Again" and a starring role in the bowling flick "Dreamer", Matheson joined a wide array of stars including John Belushi, Treat Williams and Ned Beatty for Steven Spielberg's manic period comedy "1941" (all 1979). He later landed a major supporting role as the pilot romancing an actress in the remake of Ernst Lubitsch's 1942 classic "To Be or Not To Be" (1983), produced by and starring Mel Brooks, and had important roles in the comedies "A Little Sex" (1981), "Fletch" (1985), "Drop Dead Fred" (1991) and "A Very Brady Sequel" (1996, his best feature turn in years). But for the most part, the smart aleck style that served him so well as Otter has been put to better use on the small screen than the large. Though his attempts to achieve series stardom ("Tucker's Witch", CBS 1982-83; "Just In Time", ABC 1988; "Charlie Hoover", Fox 1991) have all been short-lived to date, he has built an impressive resume starring in TV-movies, expanding his repertoire to include bad guys like the wife-batterer of "Shameful Secrets" (ABC, 1993), the child molester in "While Justice Sleeps" (NBC, 1994) and the millionaire control freak in "Sleeping with the Devil" (CBS, 1997).
Matheson started his own production company in 1985 at Burbank Studios and continued his involvement with NATIONAL LAMPOON as the co-owner and chair of the humor magazine from 1989 until 1991. He broke into feature producing with "Blind Fury" (1989), having already executive produced his "Just in Time" series, and made his directing debut with an episode of NBC's "St. Elsewhere" in 1984. Since then, he has helmed a trio of USA Network movies ("Breach of Conduct" 1994, which he also executive produced; "Tails You Live, Heads You're Dead" 1995, "Buried Alive II" 1997, both in which he acted) and Showtime's "In the Company of Spies" (1999), starring Tom Berenger and Ron Silver. As an actor, he turned in good efforts in Showtime's "Rescuers: Stories of Courage-Two Families" opposite Darryl Hannah and in CBS' "Forever Love" (both 1998) with Reba McEntire before returning to episodic TV in the recurring role of US Vice President in NBC's "The West Wing" (1999- ). He also appeared in two 1999 features, Robert Iscove's "She's All That" and Rob Reiner's "The Story of Us".