Kate Twa

Before modeling, Walsh worked at Burger King and Dairy Queen. She began as a model in Japan in the 1980s where she also taught English. Later she moved to Chicago and worked with the Piven Theatre Workshop. She also performed on National Public Radio in the production of the radio play Born Guilty.

After playing Cathy Buxton in the Homicide: Life on the Street episode "Stakeout" in 1996 and Navy Lieutenant Kirstin Blair in the Law & Order episode "Navy Blues", her first major television appearance was in 1997, when she appeared on The Drew Carey Show as Drew Carey's love interest, Nicki Fifer. She wore a fatsuit in some episodes of the show, as the Nicki character was a formerly obese woman who lost weight and slowly started to gain it back.

In 2003, Walsh appeared in Under the Tuscan Sun, with Diane Lane and Sandra Oh. She played the partner of Sandra Oh's character. Regarding her lesbian roles, Walsh said: "Do I give off a girl-on-girl vibe, I wonder? Or is it because I’m tall? I guess the chicks just dig me!"

In 2005, she was cast in her breakout role in the ABC series Grey's Anatomy, as Dr. Addison Montgomery, the estranged spouse of Derek Shepherd ("Dr. McDreamy", played by Patrick Dempsey).

In April 2007, Walsh began dating 20th Century Fox executive Alex Young. Young proposed to Walsh during a trip to San Francisco, California. They married on September 1, 2007 at the Ojai Presbyterian Church in Ojai, California. On December 11, 2008, Young filed for divorce, citing irreconcilable differences; the official date of separation in the divorce petition was listed as November 22. On December 24, 2008, Walsh counterfiled for divorce, contesting the date of separation listed in Young's divorce papers. The divorce was finalized on February 5, 2010.

Walsh supports pet adoption and frequently campaigns for the cause. On February 7, 2008, she cut the ribbon to a new dog adoption center named Pedigree(R) Dogstore in Times Square. In 2005, Walsh joined the Planned Parenthood Federation of America (PPFA)'s Board of Advocates, and in 2008 received the PPFA Maggie Award for an Artist who Stands Up for Reproductive Health and Freedom. She has participated in numerous Planned Parenthood activities, including national fundraisers, local Planned Parenthood affiliate events, the PPFA Awards Gala, and lobby day on Capitol Hill promoting the need for comprehensive sex education. In January 2009, she spoke at the Planned Parenthood Presidential Inauguration Brunch in Washington, D.C.

As announced in late 2009, Walsh partnered with the ocean conservancy and advocacy group Oceana to call for increased sea turtle protections. She joined experts from the group on a trip to the Virgin Islands to witness the turtles' hatching and moving to the sea. In her own words: "I want to get the word out and make people aware about the challenges facing sea turtles. I also want to help get legislation enacted to keep harmful fishing techniques to a minimum and help protect the sea turtles."

Walsh referenced Oceana during a September 16, 2010 appearance on The Tonight Show with Jay Leno. She told Jay Leno that her dress was covered in Su Shi and sashimi as an homage to a dress made of beef worn by Lady Gaga at the 2010 MTV Video Music Awards. While she claimed it was sustainable seafood, Walsh later admitted via her Twitter account that the Su Shi was fake. She attended a meeting on Capitol Hill in which they marked the one year anniversary since the BP oil spill. On November 3, 2012, Walsh spoke in Dubuque, IA during one of President Obama's campaign stops days before Election Day.

She continued playing the character of Addison Montgomery on the fourth season of Private Practice, for which ABC ordered a full season of episodes. On January 10, 2011, ABC picked up Private Practice for the 2011–2012 fall season (5th season). Walsh guest-starred in "Song Beneath The Song", a musical episode of Grey's Anatomy.

Beginning in September 2007, Walsh has appeared in television commercials for the 2008 Cadillac CTS. She is also the current spokeswoman for Caress' Exotic Oil Infusions body wash. On June 12, 2012, Walsh announced that the sixth season of Private Practice would be her final season. However, she mentioned she'd be open to reprise her role in Grey's Anatomy for a few guest spots.

In 2013, Walsh appeared in Full Circle, a 10-episode ensemble drama series created by Neil LaBute and airing on DirecTV's Audience Network channel.

In 2014, Walsh had a supporting role in the first season of FX's television series Fargo. She had a guest starring role in Hulu's original series The Hotwives of Orlando and later starred in the NBC series Bad Judge, which aired for one season. As of 2017, Walsh starred in the 2017 Netflix drama series 13 Reasons Why as the mother of a child who committed suicide. Her performance was dubbed to be the "best work" of her career and was met with critical acclaim.

During the 2016 election, Walsh was a supporter of Hillary Clinton, publicly endorsing her and campaigning for her several times in California, Arizona, and Virginia.

In September 2017, Walsh revealed that she was diagnosed with a benign meningioma in 2015. She underwent surgery and had the tumor successfully removed. Walsh took a nine-month break to recover.