MacLachlan has worked extensively with director David Lynch. He first appeared as Paul Atreides in the film Dune, Lynch's adaptation of Frank Herbert's Dune and as Jeffrey Beaumont in Blue Velvet. Later he played Special Agent Dale Cooper in Lynch's ABC television series Twin Peaks, reprising that role for Lynch's 1992 prequel Twin Peaks: Fire Walk With Me. Lynch commented on those roles in a GQ story about MacLachlan:

'Kyle plays innocents who are interested in the mysteries of life. He's the person you trust enough to go into a strange world with.'

In the 1993 film version of Franz Kafka's The Trial, MacLachlan played the lead role of the persecuted Josef K. He also had a recurring role in the American television series Sex and the City, portraying Dr. Trey MacDougal, the one-time husband of Charlotte York (Kristin Davis). He portrayed the spirit of Cary Grant in Touch of Pink. Noteworthy to critics was his uncanny ability to capture the nuances of Grant's mannerisms. MacLachlan also lent his voice to nefarious media mogul Donald Love in the video game Grand Theft Auto III.

In 1995 MacLachlan starred in Paul Verhoeven's Showgirls. The movie was universally panned by critics as one of the worst ever made and it collected seven Golden Raspberry Awards (from a record thirteen nominations). MacLachlan himself was deeply embarrassed with his involvement and infamously walked out of the film's premiere, in which he was allegedly heard exclaiming "I thought this was an art movie"[citation needed]. It did not seriously damage his career, unlike co-star Elizabeth Berkley, whose career was arguably ruined beyond repair.

MacLachlan has appeared in several plays, including John Kolvenbach's On an Average Day with Woody Harrelson, on Broadway in The Caretaker with Patrick Stewart, as well as in Romeo and Juliet, and the Shakespearean history Henry V.

In recent years, MacLachlan continues to play dark and/or morally ambiguous characters. This included a guest role on Law and Order: Special Victims Unit, in which he played a father who shot and killed a sociopathic child who murdered his son. After starring in the short-lived In Justice, MacLachlan has become a regular on the hit show Desperate Housewives. His character, the mysterious dentist Orson Hodge, first appeared during the show's second season, with MacLachlan becoming a full-time cast member with the start of season three. The story arc that followed Hodge's warped relationship with his mother, coupled with MacLachlan's chemistry with his on-camera love interest Marcia Cross, contributed in renewing interest in the series.

MacLachlan was born in Yakima, Washington, and graduated from Davis High School. He is married, and lives in Manhattan with his wife Desiree Gruber and their two small dogs (a Jack Russell Terrier and a Yorkie/Chihuahua mix). Blaming it on 'probably too much affection', the couple have created a website about their dogs. Mookie and Sam also have a "TV show".