Cates achieved icon status in 1982 for her popular girl role in Fast Times at Ridgemont High, particularly the topless scene in which she sheds her bikini top in a slow-motion fantasy sequence as Fast Times became a 1980s cult classic. That year, in the romance film Paradise, and in contrast to the coyness of Brooke Shields in the similarly themed The Blue Lagoon, Cates displayed copious nudity. In a People magazine article, Cates said she had expressed reservations about this situation to her father, who advised her to play it in whatever way she felt was artistically and financially honest. She is quoted as saying "I was only 17 when I did my nude scenes in Paradise. They were serious and more difficult because they were not easily justified. But the topless scene in Fast Times at Ridgemont High was funny, which made it easy." Her later film roles were more modest and largely oriented toward younger audiences, who remember her best as the female lead in the two Gremlins films, and the 1991 film Drop Dead Fred. Her face made the covers of teen magazines such as Seventeen, Tiger Beat, Teen Beat and others. In 1991, she was slated to be in Father of the Bride, but dropped out due to pregnancy. In 1994, she starred along with her husband Kevin Kline in Princess Caraboo. In 1996, she narrated the award-winning documentary short, The Flame, a film about the nonprofit world hunger organization Heifer International. In 1985, Cates appeared Off-Broadway in Rich Relations by David Henry Hwang at Second Stage Theatre.

Cates is estranged from her mother. In 1989, Cates married actor Kevin Kline, whom she had originally met while auditioning for the part that Meg Tilly ultimately won in The Big Chill. Kline and Cates make their home in New York City and have two children, Owen Kline, born in 1991 (who, in 2005, received rave reviews for his performance in The Squid and the Whale), and Greta Kline, born in 1994. Owen and Greta appeared in Cates' most recent film, The Anniversary Party (2001). The film was an ensemble drama written and directed by Scottish actor Alan Cumming and Cates' real-life best friend of the past 25 years, Fast Times at Ridgemont High co-star Jennifer Jason Leigh. In the film, Cates played, fittingly enough, a Hollywood actress who has retired from acting to be a full-time mother. In 2005, Cates opened her own boutique called Blue Tree on New York's Madison Avenue.

• The Anniversary Party (2001) .... Sophia Gold
  
• Princess Caraboo (1994) .... Princess Caraboo/Mary Baker
• Bodies, Rest & Motion (1993) .... Carol
• Drop Dead Fred (1991) .... Elizabeth 'Lizzie' Cronin
  ... aka My Special Friend (Philippines: English title)
• Gremlins 2: The New Batch (1990) .... Kate Beringer
• I Love You to Death (1990) (uncredited) .... Joey's Girl at Disco
• Largo Desolato (1990) (TV) .... Young Philosophy Student
  ... aka Vaclav Havel's 'Largo Desolato' (USA)
• Heart of Dixie (1989) .... Aiken Reed
• Shag (1989) .... Carson McBride
  ... aka Shag: The Movie
• Bright Lights, Big City (1988) .... Amanda
• Date with an Angel (1987) .... Patty Winston
• Lace II (1985) (TV) .... Lili
• Gremlins (1984) .... Kate Beringer
• Lace (1984) (TV) .... Lili
• Private School (1983) .... Christine Ramsey
  ... aka Private School... for Girls (USA)
• Baby Sister (1983) (TV) .... Annie Burroughs
• Fast Times at Ridgemont High (1982) .... Linda Barrett
  ... aka Fast Times (Australia: poster title)
• Paradise (1982) .... Sarah