Lange attended the University of Minnesota on an art scholarship but dropped out to travel. She lived in Paris, where she studied mime, before settling in New York City. A sometime model, she caught the eye of producer Dino De Laurentiis, who cast her in his big-budget remake of King Kong (1976). Lange's film debut was ridiculed by critics, and she did not work again for more than two years. After several small roles, she attracted attention with another remake, The Postman Always Rings Twice (1981). Although the sexually charged drama received mixed reviews, Lange earned praise as the adulterous wife who plots to kill her husband. Her double breakthrough came in 1982. In Frances she starred as the gifted but doomed actress Frances Farmer. The emotionally draining role almost led to a breakdown, but Lange found comic relief in the gender-bending farce Tootsie, playing a vulnerable soap opera actress. She earned Academy Award nominations for both films and was named best supporting actress for Tootsie.

Shunning conventional roles for more-complex characters, Lange continued to earn acclaim for her film performances and received Oscar nominations for Country (1984), the Patsy Cline biopic Sweet Dreams (1985), and Music Box (1989). In 1995 she won an Academy Award for best actress for Blue Sky (1994). Later notable films included Cousin Bette (1998), based on the Honoré de Balzac novel, Titus (1999), an adaptation of Shakespeare's Titus Andronicus, and the fantasy drama Big Fish (2003). In 2003 she starred as the wife of a man who decides to have a sex-change operation in the television movie Normal. Two years later she starred opposite Bill Murray (Murray, Bill) in Broken Flowers, portraying a lawyer turned animal communicator. Directed by Jim Jarmusch, the film won the Grand Prix at the Cannes Festival. Also premiering at Cannes in 2005 was the Wim Wenders–directed drama Don't Come Knocking, which starred Lange opposite her longtime companion, playwright and actor Sam Shepard (Shepard, Sam).

In addition to her screen work, Lange forged a successful stage career. After she portrayed Maggie in a 1985 television version of TennesseeWilliams's Cat on a Hot Tin Roof, Lange made her Broadway debut in 1992, playing Blanche DuBois in Williams's A Steetcar Named Desire. In 2000–01 she starred as the drug-addicted Mary Tyrone in the London West End production of Eugene O'Neill's Long Day's Journey into Night. After a 13-year absence, she returned to Broadway in 2005, portraying the domineering mother Amanda Wingfield in Williams's The Glass Menagerie.