Agutter came to television audiences as Kirsty in the twice-weekly BBC series The Newcomers. The character Kirsty was the daughter of the new managing Director of Eden Brothers, the fictional firm that was at the centre of the series. Agutter could appear only during school holidays. At this stage of her career she was listed in credits as Jennifer. In 1968, she was featured in the lavish big-budget 20th Century Fox film musical Star! with Julie Andrews as Gertrude Lawrence. In that motion picture, Agutter played Lawrence's neglected daughter Pamela. Later she played Roberta in a BBC adaptation of The Railway Children (1968) and played the same part in Lionel Jeffries's 1970 film of the book. She followed this with a more serious role in the thriller I Start Counting (1969). She also won an Emmy as supporting Actress for her television role as Fritha, in a British television adaptation of The Snow Goose (1971).

Agutter has appeared in numerous theatre productions since her stage debut in 1970, including stints at the National Theatre in 1972–73, the title role in a derivation of Hedda Gabler at the Roundhouse in 1980 and with the Royal Shakespeare Company in 1982–83. In 1987–88, Agutter played the role of Pat Green in the Broadway production of the Hugh Whitemore play Breaking the Code, about computer pioneer Alan Turing. In 1995 she was in an RSC production of Love's Labour's Lost staged in Tokyo. She is also a patron of the Shakespeare Schools Festival, a charity that enables school children in the UK to perform Shakespeare in professional theatres.

Agutter moved into adult roles, beginning with Walkabout (1971), playing a teenage schoolgirl lost with her younger brother in the Australian outback. She auditioned for the role in 1967 but funding problems delayed filming until 1969. The delay meant Agutter was 16 at the time of filming, which allowed the Director to include nude scenes. Among them was a five-minute skinny-dipping scene, which was cut from the original US release. She said at the 2005 Bradford Film Festival at the National Media Museum that she was shocked by the film's explicitness but remains on good terms with Director Nicolas Roeg.

She relocated to the United States in 1974 to pursue a Hollywood career and subsequently appeared in Logan's Run (1976), Amy (1981), An American Werewolf in London (1981) and Child's Play 2 (1990). Parallel to her Hollywood film roles, Agutter continued appearing in high-profile British films such as The Eagle Has Landed (1976), Equus (1977)—for which she won a BAFTA Award for Best Actress in a Supporting Role—and The Riddle of the Sands (1979). In 1981 she also co-starred in The Survivor, an Australian adaptation of the James Herbert novel, and was nominated for an AACTA Award for Best Actress in a Leading Role.

Agutter moved to Hollywood at 21 and appeared in a number of films over the next decade, including The Eagle Has Landed (1976), Logan's Run (1976), Equus (1977, for which she won a BAFTA as Best Supporting Actress), An American Werewolf in London (1981) and an adaptation of the James Herbert novel, The Survivor (1981). Agutter has commented that the innocence of the characters she played in her early films, combined with the costumes and nudity in later adult roles such as Logan's Run, Equus and An American Werewolf in London, are "perfect fantasy fodder".

At an arts festival in Bath, Somerset, Agutter met Johan Tham, a Swedish hotelier who was a Director of Cliveden Hotel in Buckinghamshire. They married on 4 August 1990, and their son Jonathan was born on 25 December 1990. Agutter lives in London but has a keen interest in Cornwall and once owned a second home there on the Trelowarren Estate, in one of the parishes on the Lizard peninsula. She was appointed Officer of the Order of the British Empire (OBE) in the 2012 Birthday Honours for charitable services.

In 2008 she also guest-starred in the Doctor Who audio drama The Bride of Peladon and played an outlawed scientist in The Minister of Chance. She has appeared as a guest star character ("Fiona Templeton") in the Radio 4 comedy Ed Reardon's Week.

Agutter was born in Taunton, Somerset, England. She is the daughter of Catherine (née Lynam) and Derek Brodie Agutter, a former British Army officer and entertainment organiser. As a child, she lived in Singapore, Dhekelia (Cyprus) and Kuala Lumpur (Malaya). She was discovered at Elmhurst Ballet School, a boarding school she attended aged 8–16, when a casting agent looked for a young English-speaking girl for a film. She did not get the part but he recommended her to the producers of East of Sudan (1964).

Agutter has been attached to several causes throughout her career. She has been involved in raising awareness of the illness cystic fibrosis, which she believes was responsible for the deaths of two of her siblings. Her niece has the disease. At Agutter's suggestion, an episode of Call the Midwife focused on cystic fibrosis. She has also worked in support of charities, in particular the Cystic Fibrosis Trust, of which she is a patron (she is also a carrier of the genetic mutation). In August 2014, Agutter was also one of 200 public figures who were signatories to a letter to The Guardian expressing their hope that Scotland would vote to remain part of the United Kingdom in September 2014's referendum on that issue.