After graduating in 1964, Williamson worked briefly as an engineer for General Motors Holden. After a stint as a lecturer for Swinburne University, he turned to writing plays in 1967.
Williamson rose to prominence in the early 1970s, with works such as Don's Party (later turned into a 1976 film), a comic drama set during an Australian federal election; and The Removalists (1971). He also collaborated on the screenplays for Gallipoli (1981) and The Year of Living Dangerously (1982). Williamson's work as a playwright focuses on themes of politics, loyalty and family in contemporary urbanisation Australia, particularly in two of its major cities: Melbourne and Sydney.
Major works include The Club, The Department, Travelling North, The Perfectionist, Emerald City, Money and Friends and Brilliant Lies.
Recent work has included Dead White Males, a satirical approach to postmodernism and university ethics, Up for Grabs, which starred Madonna in its London premiere and the Jack Manning Trilogy (Face To Face, Conversation, Charitable Intent) which take as their format community conferencing, a new form of restorative justice which Wiliamson became interested in the late 1990s and early 2000s.
In recent years he has alternated work between larger stages (including "Soul Mates", "Amigos" and "Influence" - all premiered with the Sydney Theatre Company) and smaller ones (including the Manning trilogy, "Flatfoot" and "Operator", which premiered at the Ensemble Theatre). However, in 2005, he announced his retirement from main-stage productions.
Williamson was instrumental in the founding of a cultural festival in Noosa, Queensland, titled Noosa Longweekend Festival.
In August 2006 Cate Molloy, former Australian Labor Party member of the Queensland Parliament for the Electoral district of Noosa, announced that Williamson would be her campaign manager as she sought to recontest her seat as an Independent.