A life member of The Actors Studio, Stephens starred in the soap opera Bright Promise as Jennifer Matthews from 1969–1970; her first role in a television series. She later appeared in the soap opera Days of Our Lives as Mary Anderson in 1975.

Stephens made her film debut in 1978, when she made a brief appearance in John Carpenter's classic horror Halloween, as Nurse Marion Chambers. She was cast in John Carpenter's next film in 1981, Escape From New York. Her final collaboration with Carpenter came the same year, in which she reprised her role as Marion Chambers with the sequel Halloween II, having a much more significant presence on-screen. She appeared in several films such as American Dreamer, Russkies, and D2: The Mighty Ducks, before appearing for the final time as Marion Chambers in Halloween H20: 20 Years Later, the seventh film in the franchise. She has not been in a film since 2002, when she appeared in A Time for Dancing. Stephens has made guest appearances on many sitcoms such as All in the Family, CHiPs, Cheers, Ally McBeal, and Boston Legal.

Stephens has been married to Rick Rosenthal since May 23, 1981. Stephens and Rosenthal met while filming Halloween II. They have three children, one of which is Cinematographer Noah Rosenthal.