2007's Shotgun Stories, Nichols' debut feature film starring Shannon, was shot on a budget of only $250,000. Nichols moved into larger independent productions with 2011's Take Shelter, also starring Shannon, and 2012's Mud, starring Matthew McConaughey, which competed for the Palme d'Or at the 2012 Cannes Film Festival. In 2012, he became the President of the Jury of the 7th Rome Film Festival.
His 2016 sci-fi drama film Midnight Special competed for the Golden Bear at the 66th Berlin International Film Festival.
