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In the early 1980s, Martindale worked for four years at the Actors Theatre, Louisville, Kentucky. While there she became good friends with fellow actress Kathy Bates.
Martindale made her Broadway debut in 2004 as Big Mama in Cat on a Hot Tin Roof. She received a Tony Award nomination, for Best Featured Actress in a Play, for her work in the role.
Prior to that, Martindale had starred in several Off-Broadway stage productions, most notably originating the role of Truvy Jones in the first production of Steel Magnolias Off-Broadway, as well as starring in the first national tour of the play. Other Off-Broadway appearances include Always...Patsy Cline and The Sugar Bean Sisters.
Martindale's film roles include turns as Susan Sarandon's character's fellow nun in Dead Man Walking, and, again with Sarandon, in Lorenzo's Oil. She appeared as Leonardo DiCaprio's character's doctor in Marvin's Room; and as Hilary Swank's character's selfish mother in Million Dollar Baby. Other films include The Human Stain with Anthony Hopkins and Nicole Kidman, Nobody's Fool with Paul Newman, 28 Days with Sandra Bullock, Proof of Life with Russell Crowe and Meg Ryan, and Practical Magic, again with Nicole Kidman and Sandra Bullock. She was featured in Paris, je t'aime. She played Mama Cox in the 2007 film Walk Hard, played Ruby in Hannah Montana: The Movie and played Miss Elizabeth Ham in the movie Secretariat.
Martindale had a role in August: Osage County (2013), a film adaptation of the Pulitzer Prize-winning play by Tracy Letts. She played Mattie Fae Aiken, the sister of lead character Violet Weston (Meryl Streep). Filming took place in the fall and winter of 2012.
Martindale has been described as a character actress.
One of her first television roles came in the miniseries Lonesome Dove. A series of character and guest appearances followed in a wide range of TV shows. Martindale played recurring character Camilla Figg on the first three seasons of Dexter and had a recurring role in the A&E courtroom drama 100 Centre Street with Alan Arkin.
From 2007 to 2008, she had a recurring role as Nina Burns, a neighbor of the Malloy/"Rich" family in The Riches with Minnie Driver and Eddie Izzard.
In 2011, Martindale joined the cast of Justified for the second season. She played the role of Mags Bennett, matriarch of the Bennett crime family which controlled much of the drug activity in the fictional version of Harlan County, Kentucky. She won the Primetime Emmy Award for Outstanding Supporting Actress in a Drama Series for her performance.
After learning of the nomination, Martindale told CNN she hoped that it would open up more doors for older women in Hollywood. "People really identify with this character [Mags Bennett] and I think it's because it is a character that is powerful and older and extremely mean", she said. She won Best Supporting Actress in a Drama Series at the Critics' Choice Television Awards for her role as Mags Bennett.
In February 2012 it was announced Martindale had been cast in the ABC comedy pilot Counter Culture, which was not picked up.
Martindale returned to television in late January 2013 in the spy drama The Americans on FX Network. She played Claudia, the KGB "handler" of two Soviet spies living in 1980s Cold War America.
She co-starred in the sitcom The Millers on CBS. In 2015, she began a recurring role as Ruth Eastman, Peter Florrick's new campaign manager on The Good Wife. Martindale took up the role of Ruth again in 2018 in season two of The Good Fight, the sequel to The Good Wife. She appears as a fictionalized version of herself on the Netflix animated comedy BoJack Horseman. Her fictional version is easily angered and temperamentally violent, moonlighting as a bank robber and going on frequent criminal heists. BoJack consistently refers to her as "Esteemed Character Actress Margo Martindale", while most other characters begin addressing her with "Beloved."
Martindale played Audrey Bernhardt, matriarch of the family on the Amazon series Sneaky Pete starring Giovanni Ribisi, for the 2015 pilot, the first season which aired in January 2017, and the second and third seasons as well. She also played Mike's ‘Aunt Rosemary’ in two episodes of Mike & Molly.
In 2020, Martindale portrayed US Congresswoman Bella Abzug on the FX miniseries Mrs. America and received a nomination for the Primetime Emmy Award for Outstanding Supporting Actress in a Limited Series or Movie.
In November 2019, I Spy, a podcast hosted by Martindale and produced by Foreign Policy, was released.