He is known for his portrayal of "side-kicks" and "henchmen" such as Bob the Goon in Batman, Cookie in City Slickers, and Malak in Conan the Destroyer. He portrayed Frog Rothchild Jr. on the ABC sitcom Best of the West from 1981 to 1982. Walter has acted in six Jonathan Demme films: Something Wild (1986), Married to the Mob (1988), The Silence of the Lambs (1991), Philadelphia (1993), Beloved (1998), and The Manchurian Candidate (2004). He has been directed by Danny DeVito in three films: Matilda (1996), Death to Smoochy (2002), and Duplex (2003). The two have acted together in nine films, the first being Goin' South in 1978.
His portrayal of Miller, the philosopher mechanic of Alex Cox's Repo Man, earned Walter a Saturn Award in 1984 for Best Supporting Actor. The film has achieved cult status due in part to Miller's memorable lines about "a plate of shrimp" and "the more you drive, the less intelligent you are."
Walter's television credits include guest appearances on Taxi, Charlie's Angels, Hill Street Blues, Amazing Stories, Moonlighting, David Lynch's On the Air, Melrose Place, The Division and Veronica Mars. He had the recurring character on Nash Bridges as Angel from 1996-2001 and a recurring character on Reno 911! as Sheriff Walter Chechekevitch from 2003-2006.