Coolidge first made her reputation by directing many award winning documentaries in New York. While in New York, she helped found the Association of Independent Video and Filmmakers (AIVF) and the IFP.
She then moved to Hollywood in 1976. She spent several years as a part of the Zoetrope Studio created by Francis Ford Coppola. Her breakthrough film in Hollywood was the independently-produced Valley Girl (1983), which is now best remembered for launching the career of Nicolas Cage, who is actually Francis Ford Coppola's nephew. It also helped the popularity of the British band Modern English's hit song I Melt with You. Her film Rambling Rose (1991) won three IFP Independent Spirit Awards for Best Picture, Best Director and Best Supporting Actress for Diane Ladd, and earned Oscar and Golden Globe nominations for Ladd and Laura Dern (Best Actress). Rambling Rose was well reviewed and made many top ten lists for the year. Despite a limited release hampered by economic problems suffered by the production company the film played for months without advertising and earned many honors.
In 1992, Coolidge was awarded the Women in FilmCrystal Award for outstanding women who, through their endurance and the excellence of their work, have helped to expand the role of women within the entertainment industry.
She has also served on the board of the Directors Guild of America, the Academy of Motion Pictures and the American Film Institute, among others.