Like many studio heads, Medavoy began his career working in the mailroom at Universal Studios, where he eventually became a casting director. In 1965, he was hired as an agent trainee and subsequently became one of the leading talent agents in Hollywood, with a client roster that included Jane Fonda, Michelangelo Antonioni, Karel Reisz, Steven Spielberg, Francis Ford Coppola, Robert Aldrich, Jeanne Moreau and George Cukor. As vice president and head of the motion picture department at International Famous Agency (from 1971-74), Medavoy was involved in packaging such films as the Oscar-winning "The Sting" (1973), "Young Frankenstein" (1974) and "Jaws" (1975).
In 1974, Medavoy shifted to film production joining United Artists (UA) as senior vice president of production. Under his tenure, he influenced the production and release of such seminal 70s movies as "One Flew Over the Cuckoo's Nest" (1975; Oscar for Best Picture), "Network" (1976), "Rocky" (1976; Oscar for Best Picture) and "Annie Hall" (1977; Oscar for Best Picture). Along with UA's four most senior management executives--Arthur Krim, Eric Pleskow, William Bernstein and Robert Benjamin (the five stars in the company's constellation logo)--Medavoy founded mini-major Orion Pictures in 1978 in partnership with Warner Communications. In 1982, the partners (minus Benjamin) purchased Filmways distribution company and created Orion Pictures Corp. At Orion, Medavoy was actively involved with such Oscar-winning Best Pictures as "Amadeus" (1984) and "Platoon" (1986), as well as "Robocop" (1987) and "Mississippi Burning" (1988), and cultivated studio relationships with artists like Kevin Costner, Michelle Pfeiffer, Jessica Lange and Dennis Quaid.
Medavoy assumed the chairmanship of TriStar Pictures in 1990, where he oversaw the development, production, marketing and distribution of the studio's output. His four-year tenure at the studio was a tumultuous one. There were reported clashes with then-chairman Peter Guber and the disappointing box-office returns for "Bugsy" (1991, although the film earned 10 Academy Award nominations) and Woody Allen's "Husbands and Wives" (1992, which was overshadowed by the director's public personal troubles). "The Fisher King" (1991) was an expensive production that had its champions but only earned a modest profit. Medavoy did have his share of box-office successes, notably James Cameron's blockbuster sequel "Terminator 2: Judgment Day" (1991), "Hook" (also 1991), Steven Spielberg's spin on "Peter Pan", "Basic Instinct" (1992), which catapulted Sharon Stone to stardom, "Philadelphia" (1993), the first studio film to deal with AIDS which earned star Tom Hanks his first Academy Award, Nora Ephron's romantic comedy "Sleepless in Seattle" (also 1993) and "Legends of the Fall" (1994), which solidified Brad Pitt's appeal. Medavoy resigned in 1994 in part because of his ongoing disputes with Guber.
Within a year, Medavoy had rebounded with Phoenix Pictures, a production company with a deal for theatrical distribution through Sony Pictures Entertainment. As chairman and CEO, he announced plans to produce a slate of up to eight pictures per year, most budgeted in the $25 million range. The first two films to be completed were Milos Forman's "The People vs. Larry Flynt" and Barbra Streisand's "The Mirror Has Two Faces" (both 1996). While Oliver Stone's "U-Turn" (1997) failed to perform up to expectations, anticipation ran high for Phoenix's 1998 releases "Apt Pupil" and Terrence Malick's "The Thin Red Line".