Her first movie role was as a prostitute looking to go straight in the Steven Seagal film Out for Justice. In 1994, Margulies was cast in a role in the pilot episode of ER as a character who, despondent over her relationship with George Clooney's character, Doug Ross, attempted suicide. Her character was originally supposed to die due to the suicide attempt, however, the producers changed the plot and she went on to play the role of Nurse Carol Hathaway for six years, winning an Emmy nomination for every year that she was on the show, and the award itself for her first year's performance. She was originally offered a $27 million contract to remain on the show for an additional three years, stretching into Season 9 of the show. However, Margulies turned it down which led to whirlwind of media speculation and buzz the year she exited the show.

Since her departure, Margulies has worked regularly on stage and screen. On stage she has appeared in a MCC Theater production of Kate Ro