Daly began his career working in summer stock productions ("Fifth of July" and "Buried Child", both 1981) while a student at Bennington College. Upon graduation he spent a couple of seasons at the Trinity Square Repertory in Providence, Rhode Island before moving to NYC where he made his Off-Broadway debut in "Fables for Friends" (1984). Daly's Broadway debut was as Annette Bening's love interest in Tina Howe's "Coastal Disturbances" in 1987.

In the meantime, Daly's film career had begun with the role of Billy, a twentysomething with a pregnant girlfriend reluctant to marry him, the stand-up man of the group of six friends around whom Barry Levinson's feature directorial debut "Diner" revolves. Despite this promising beginning, he had little luck in subsequent films. Small roles in "Just the Way You Are" (1984) and Alan Rudolph's "Made in Heaven" (1987) came next, and his first starring role in the unimpressive horror fantasy "Spellbinder" (1988) was followed with a turn in the forgettable comedy "Love or Money" (1990). Even after he became a TV star thanks to "Wings", Daly enjoyed a film career that remained lukewarm at best. He was the rugged lead in Peter Yates' little-seen adventure "Year of the Comet" (1992) and starred in two notable flops, the erotic thriller "Caroline at Midnight" (1993) and the dubious comedy "Dr. Jekyll and Ms. Hyde" (1995), with Sean Young as his alter ego. The actor fared slightly better in the 1995 indie "Denise Calls Up", and had a few good moments as Whoopi Goldberg's smarmy yuppie co-worker in "The Associate" (1996). In 1998, Daly added charm to the role of Dr Robert Joely, the arrogant boyfriend of Paul Rudd's nice guy George, in the skewed romantic comedy "The Object of My Affection", and he capably played a perennial bachelor who ultimately hits up his numerous former girlfriends for dating advice in the independent comedy "Seven Girlfriends" (2000).

The small screen has proved more fertile ground for Daly, who appeared regularly in the medical series "Ryan's Four" (ABC, 1983), the domestic sitcom "Almost Grown" (CBS, 1988-89) and had guest stints including a 1986 installment of the NBC remake series of "Alfred Hitchcock Presents" and a 1989 episode of the network's "Midnight Caller" before stardom finally arrived with "Wings". Here he co-starred as amiable pilot Joe Hackett alongside Steven Weber's ne'er-do-well Brian Hackett, the two playing brothers co-owners of a small Nantucket airline. Portraying the naive, obsessive character allowed Daly the opportunity to polish his comic skills, and his down-to-earth appeal helped to round out the eccentric ensemble cast and helped the show remain alive for so long. Daly worked extensively in TV-movies and miniseries before, during and after the run of "Wings", beginning with 1984's "I Married a Centerfold" (NBC). More impressive credits include "The Rise and Fall of Daniel Rocket" (PBS, 1986), a childhood saga co-starring Tom Hulce and based on an Off-Broadway play, the earnest Native American drama "Red Earth, White Earth" (CBS, 1989) and the miniseries "Queen" (CBS, 1993), based on Alex Haley's book.

As time marched on, Daly's boy-next-door good looks (described by the actor as "a drawback") bore the marks of age, and this edge, paired with his high profile from successful series work, helped the actor secure more challenging roles. Impressive turns as cult leader David Koresh in "In the Line of Duty: Ambush in Waco" (NBC, 1993) and as a death-row convict in the anti-death penalty drama "Witness to the Execution" (NBC, 1994) were among the actor's small screen highlights. He was later featured as astronaut Jim Lovell in the acclaimed HBO miniseries "From the Earth to the Moon" in 1998 and executive produced the fact-based "Execution of Justice" (Showtime, 1999), in which he starred as homicidal San Francisco politician Dan White, a conservative who assassinated Mayor George Moscone and groundbreaking openly gay Supervisor Harvey Milk. He starred in the ABC event miniseries "Stephen King's Storm of the Century" and played Charles Dubose, an attorney who helps the daughter of a slave mother and plantation owner father get her rightful inheritance in the 2000 Showtime drama "A House Divided".

2000 saw Daly return to series television with a starring role as Dr Richard Kimble, the titular man on the run in the CBS remake series "The Fugitive". Exhibiting his physical capabilities for action sequences while earning the crucial sympathy of the audience, Daly proved a good choice to play the legendary wrongly accused escaped convict.