Alda began his career in the 1950s as a member of the Compass Players comedy revue. In 1966, he starred in the musical The Apple Tree on Broadway; he was nominated for the Tony award as Best Actor in a Musical for that role.

Alda made his Hollywood acting debut as a supporting player in Gone are the Days!—a film version of the highly successful Broadway play Purlie Victorious, which co-starred veteran actors Ruby Dee and her husband Ossie Davis. Other film roles would follow, such as his portrayal of author, humorist, and actor George Plimpton in the film Paper Lion as well as The Extraordinary Seaman (1969) and the occult-murder-suspense thriller The Mephisto Waltz, with actress Jacqueline Bisset During this time, Alda frequently appeared as a panelist on the 1968 revival of What's My Line?. He also appeared as a panelist on I've Got a Secret during its 1972 syndication revival.

In early 1972 Alda auditioned for and was selected to play the role of "Hawkeye Pierce" in the TV adaptation of the 1970 film M*A*S*H. He was nominated for 21 Emmy Awards, and won five. He took part in writing 19 episodes, including the finale, and directed 32. When he won his first Emmy Award for writing, he was so happy that he performed a cartwheel before running up to the stage to accept the award. He was also the first person to win Emmy Awards for acting, writing and directing for the same series. Richard Hooker, who wrote the novel on which M*A*S*H was based, did not like Alan Alda's portrayal of Hawkeye Pierce (Hooker, a Republican, had based Hawkeye on himself, whereas Alda took the character in a more left-wing direction). Alda also directed the show's 1983 2½ hour series finale "Goodbye, Farewell, and Amen" which remains the single most-watched episode of any TV series. Alda is the only series regular to appear in all 251 episodes.

As more and more of the original series writers left the series, Alda gained more control and by the final seasons he had become project and creative consultant. Under his watch, M*A*S*H more openly addressed political issues. As a result, the 11 years of M*A*S*H are generally split into two eras: the Larry Gelbart/Gene Reynolds "comedy" years (1972-1977), and the Alan Alda "dramatic" years (1977-1983).

Alda's prominence in the enormously successful M*A*S*H gave him a platform to speak out on political topics, and he has been a strong and vocal supporter of women's rights and the Feminist Movement. He co-chaired, with former First Lady Betty Ford, the ERA Countdown campaign. In 1976, the Boston Globe dubbed him "the quintessential Honorary Woman: a feminist icon" for his activism on behalf of the Equal Rights Amendment. As a liberal activist he has been a target for some political and social conservatives.

Alan Alda has also played Nobel Prize-winning physicist Richard Feynman in the play QED, which has only one other character. Although Peter Parnell wrote the play, Alda both produced and inspired it. Alda has also appeared frequently in the films of Woody Allen, and he was a guest star five times on ER, playing Dr. Kerry Weaver's mentor, Gabriel Lawrence. During the later episodes, it was revealed that Dr. Lawrence was suffering from the early stages of Alzheimer's disease. Alda also had a co-starring role as Dr. Robert Gallo in the 1993 TV movie And the Band Played On.

During M*A*S*H's run and continuing through the 1980s, Alda embarked on a successful career as a writer and director, with the ensemble The Four Seasons being perhaps his most notable hit. Betsy's Wedding is his last directing credit to date. After M*A*S*H, Alda took on a series of roles that either parodied or directly contradicted his "nice guy" image. His role as a pompous celebrity comedian in Crimes and Misdemeanors was widely seen as a self-parody, although Alda denied this.

In 1995, he starred as the President in Michael Moore's political satire/comedy film Canadian Bacon. Around this time, rumors circulated that Alda was considering running for the United States Senate in New Jersey, but he himself denied this. In 1996, Alda played Henry Ford in Camping With Henry and Tom, based on the book by Mark St. Germain. Beginning in 2004, Alda was a regular cast member on the NBC program The West Wing, portraying Republican U.S. Senator and presidential hopeful Arnold Vinick, until the show's conclusion in May 2006. He made his premiere in the sixth season's eighth episode, "In The Room," and was added to the opening credits with the thirteenth episode, "King Corn." In August 2006, Alda won an Emmy for his portrayal of Arnold Vinick in the final season of The West Wing.

In 2004, Alda portrayed conservative Maine Senator Owen Brewster in Martin Scorsese's Academy-Award winning film The Aviator, in which he co-starred with Leonardo DiCaprio.

Throughout his career, Alda has received 31 Emmy Award nominations and two Tony Award nominations, and has won seven People's Choice Awards, six Golden Globe awards, and three Directors Guild of America awards. However, it was not until 2004, after a long distinguished acting career, that Alda received his first Academy Award nomination, for his role in The Aviator.

Alda also wrote several of the stories and poems that appeared in Marlo Thomas's Free to Be... You and Me television show.

Alda starred in the original Broadway production of the play 'Art', which opened on March 1, 1998, at the Royale Theatre. The play won the Tony Award for best original play.

In the spring of 2005, Alda starred as Shelly Levene in the Tony Award-winning Broadway revival of David Mamet's Glengarry Glen Ross, for which he received a Tony Award nomination for Best Featured Actor in a Play.