After finding some success in film and on stage, Daniels scored his breakout role as Debra Winger's philandering husband in Terms of Endearment (1983). He followed this success with a memorable role as a silver-screen hero who steps off the screen to romance Mia Farrow's lonely housewife in Woody Allen's Purple Rose of Cairo. In 1991, Daniels founded the Purple Rose Theatre Co. in Michigan to establish a creative home for Midwestern actors.
Daniels continues to act and direct in films and theater. Other notable movies include Arachnophobia, Gettysburg, Dumb & Dumber, Fly Away Home, Pleasantville and Blood Work.