Walters has starred in several of Paul Thomas Anderson's films, including Hard Eight, Boogie Nights, Magnolia and The Master. She also appeared on such television shows, such as Roseanne, Seinfeld, NYPD Blue and CSI: Crime Scene Investigation. In 2003, Walters played Lila in Cold Mountain, and in 2004, played Andrea Treborn in The Butterfly Effect. She guest-starred as Sylvia Greene on Desperate Housewives in 2007, and played the role of Wanda Henrickson in the HBO drama Big Love from 2006 to 2010.
In June 2008, she married Cinematographer Alex Vendler. In September 2010, she filed for divorce.
In 2017, it was announced that Walters would write for her directorial debut film Waterlily Jaguar, about a struggling Novelist attempting to write a more serious book. James LeGros also stars in the film. Walters played the suspected victim in the episode "Something Happened" for the NBC series Law & Order: Special Victims Unit.
