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A graduate of New York's High School of the Performing Arts and the Neighborhood Playhouse School of the Theatre, Walter has extensive theater credits that include productions both on- and off-Broadway. On Broadway, she has appeared in Peter Ustinov's Photo Finish, which earned her the Clarence Derwent Award as Most Promising Newcomer, A Severed Head, Advise and Consent, Night Life and Neil Simon's Rumors. Her off-Broadway credits include roles at Playwrights Horizons and in Tartuffe, opposite Ron Leibman, at the Los Angeles Theater Center.

Walter received an Emmy Award for Best Dramatic Actress in the television series Amy Prentiss. She also earned Emmy nominations for her guest-starring roles in episodes of Trapper John, M.D. and The Streets of San Francisco. Walter's additional television credits include 90210; Saving Grace; Arrested Development; Mission Impossible; The Immortal; All That Glitters; Murder, She Wrote; Coach; Law & Order; Touched By An Angel; Just Shoot Me and Jack & Jill, among others. Additionally, she was the voice of the mother dinosaur on the series Dinosaurs and was also a regular on The Round Table, Oh Baby and Aaron's Way. She is currently shooting an episode of Law & Order: SVU.

Walter starred in the miniseries Arthur Hailey's Wheels. She also starred in numerous MOWs including The Immortal, Three's a Crowd, Women in Chains, Home for the Holidays, She's Dressed to Kill, Scruples and Thursday's Child, among others.

Walter's feature films include Clint Eastwood's directorial debut, Play Misty for Me, which earned her a Golden Globe nomination. Walter made her screen debut in 1964 in the film Lilith, starring opposite Warren Beatty. Her additional film credits include roles in Sidney Lumet's The Group, Grand Prix, Bye Buy Braverman, Number One, Spring Fever, Going Ape, The Flamingo Kid, Tapeheads, Ghost in the Machine, P.C.U., The Temptress, The Slums of Beverly Hills, Grownups and most recently as Adrien Brody's mother in Dummy. Walter lives in New York with her husband, actor Ron Leibman.