Plimpton began her career in modeling, securing an early 80s campaign for Calvin Klein. Barring a featured appearance in the 1981 film Rollover, she began acting in films with the deep-south independent drama The River Rat opposite Tommy Lee Jones. Her breakthrough performance was as Stef Steinbrenner in the 1985 cult classic The Goonies. She also appeared that year in a featured role on the television sitcom Family Ties.

This would begin a trend of Plimpton being repeatedly cast in the role of a rebellious tomboy for several years, beginning with her critically lauded performance as the Reverend Spellgood (Andre Gregory)'s daughter in the 1986 film The Mosquito Coast starring Harrison Ford. It was on the set of this film that she met her future real-life love interest River Phoenix.

A critically praised but commercially unsuccessful venture with Barbara Hershey in the 1987 film Shy People was followed by a disastrous and panned performance in the quirky 1988 ensemble comedy Stars and Bars. This was released shortly before Plimpton's second collaboration with Phoenix in the film Running on Empty, an Academy Award-nominated film for which she was nominated for a Young Artist Award.

Plimpton's high-profile relationship with Phoenix, including their appearance together at the Oscars where she was bald, overshadowed her work. (Their relationship would later end due to Plimpton's objection to his drug use, from which he died in 1993.) Plimpton began what became a career trend, mixing small independent film appearances with supporting roles in big-budget films. She appeared in the 1989 Woody Allen film Another Woman; that year, she co-starred with Jami Gertz as a cancer patient in the German film Zwei Frauen, which was released in America as Silence Like Glass. The film was nominated for Outstanding Feature Film at the German Film Awards.

Plimpton's most high-profile performance since The Goonies was in the 1989 Steve Martin film Parenthood. Plimpton had shaved her head bald to play a cancer patient in Zwei Frauen, and her reputation for playing rebellious teenagers secured her the role of the indignant teenage daughter (who shaves her head) of Dianne Wiest. Coincidentally, Plimpton starred alongside Joaquin Phoenix (then credited as Leaf Phoenix), the younger brother of her former boyfriend River, in this role.

Plimpton worked sparingly in 1991 with a supporting role in the Robert De Niro film Stanley & Iris. In 1992 Plimpton appeared as a lesbian terrorist in the independent film Inside Monkey Zetterland and was finally given a starring role in the film Samantha. The film received lukewarm reviews and did not succeed financially.

Despite its shortcomings, the success of Samantha garnered Plimpton a variety of roles in 1993. She appeared with Cuba Gooding, Jr., in the television film Daybreak and was a part of the mostly improvised television film Chantilly Lace. She had a featured role in the big-budget films Josh and S.A.M. and played the lead in the critically blasted film adaptation of the Carolyn Chute novel The Beans of Egypt, Maine. As a testament to her own "indie cred", Plimpton also appeared that year as herself in the independent film My Life's in Turnaround, a movie about filmmakers trying to make a movie.

Plimpton continued to make appearances in featured roles in both independent films and mainstream movies from 1994 through 1997, most notably as the lesbian lover of radical feminist Valerie Solanas in the film I Shot Andy Warhol.

In 1997 the Showtime Network cast Plimpton as the female lead in a television film called The Defenders: Payback. The show was a retooling of the classic television show by the same name, and the characters were descendants of character Lawrence Preston, a role reprised by actor E.G. Marshall. The intent was to spin the program off into a series akin to Law & Order, but Marshall died in 1998. Two additional episodes (The Defenders: Choice of Evils and The Defenders: Taking the First) were aired as specials that year. The decision was made to not continue production (despite high ratings and critical praise) due to Marshall's death.

Plimpton's career in film began to stall and she became involved with The Steppenwolf Theatre Company in Chicago. She is single-handedly credited with revitalizing the play Hedda Gabler through her work there. In 1998 she appeared in the John Waters film Pecker; the film was lambasted but Plimpton's work was praised. This also occurred with her appearance in the 1999 bomb 200 Cigarettes.

In 1999 Plimpton had a recurring role in the television drama ER as Meg Corwyn. In 2001 she co-starred with Jacqueline Bisset in The Sleepy Time Gal, which was nominated for the Grand Jury Prize at Cannes Film Festival. In further testament to her cult following, Plimpton was name-dropped in the 2000 album Ghost Stories by the band The Lawrence Arms on a song called "Light Breathing (Me and Martha Plimpton in a Fancy Elevator)".

In 2002 she was nominated for an Emmy Award for her guest appearance on the television drama Law and Order: Special Victims Unit. She was the voice of Miss Crumbles in the 2004 animated film Hair High by Bill Plympton. In 2004 she also guest-starred on an episode of the program 7th Heaven; she received her first writing credit for a different episode of the show that year entitled "Red Socks".

As of 2005 she continues to act in television, film and on stage. She has begun narrating audiobooks, notably the novel Diary by Chuck Palahniuk and Mrs. Kimble by Jennifer Haigh. She is currently dating Fred Armisen of Saturday Night Live. Martha Plimpton currently has a recurring role on the NBC show Surface.