MacNicol was cast in the off-Broadway play, Crimes of the Heart. The production eventually moved to Broadway, and he won the Theatre World Award. It was also during this production that a casting agent noticed him and called him in to read for his eventual role in Sophie's Choice. In 1981 he landed the starring role in his first film, Dragonslayer, opposite Sir Ralph Richardson.
In 1987, he starred in the Trinity Repertory Company's original production of the stage adaptation of All the King's Men, which first appeared at the Dallas Theater Center. This adaptation was developed with the consultation of the author himself.
Among his other stage credits is the Broadway production of Black Comedy/White Lies, MacNicol also has further extensive classical repertory theater background, including the New York Shakespeare Festival in which he played title roles in Richard II and Romeo and Juliet, and appeared in Twelfth Night, Rum and Coke and Found a Peanut.
On film, he played the naive Southern writer who fell in love with Meryl Streep in Sophie's Choice; the museum curator Janosz Poha in Ghostbusters II and camp director Gary Granger alongside future NUMB3RS costar David Krumholtz in Addams Family Values. Other film credits include HouseSitter and American Blue Note.
In 1994 MacNicol had a prominent role as Alan Birch for the first season and less than half of the second season of Chicago Hope before departing to take on a role on the TV series Ally McBeal which was also created by David E. Kelley the same person who created Chicago Hope. However, he did return for one final guest appearance in episode five of the show's fifth season.