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Posey made her film debut in Joey Breaker (1993). Following small roles in Coneheads and the cult classic Dazed and Confused (both also 1993), she was labeled "Queen of the Indies" for starring in a succession of independent films throughout the 1990s, such as Sleep with Me (1994), Frisk, Party Girl, The Doom Generation, Kicking and Screaming (all 1995), The Daytrippers (1996), Henry Fool, The House of Yes and Clockwatchers (all 1997). Her other notable film appearances include You've Got Mail (1998), Scream 3 (2000), Josie and the Pussycats (2001), Personal Velocity, The Sweetest Thing (both 2002), Blade: Trinity (2004), Superman Returns, Fay Grim (both 2006), Broken English (2007), The Eye (2008), Spring Breakdown (2009), Inside Out (2011), Irrational Man (2015), Café Society (2016), and Columbus (2017).

She frequently works with Christopher Guest and has appeared in several of his mockumentaries: Waiting for Guffman (1996), Best in Show (2000), A Mighty Wind (2003), For Your Consideration (2006), and Mascots (2016).

Outside of film, Posey starred in the television movie Hell on Heels: The Battle of Mary Kay (2002) and has guest-starred on numerous series, such as Futurama (2000), The Simpsons (2000), Will & Grace (2001), Boston Legal (2006), Parks and Recreation (2011), The Good Wife (2011–12), Louie (2012), Inside Amy Schumer (2014), and Search Party (2016). From 2018 to 2021, she starred as Dr. Smith on the Netflix series Lost in Space.