Born Patsy Ann McClenny, her first job was as a stand-in for Faye Dunaway during location filming for the movie Bonnie and Clyde (1967). She took her new first name, Morgan, from the 1966 David Warner film, Morgan: A Suitable Case For Treatment. Moving to New York City, she secured her first on-screen role, appearing as maniacal Jennifer Pace in the daytime soap opera Search for Tomorrow from 1973 until 1977.

She moved to Los Angeles and was cast as Jenna Wade in the television series Dallas in 1978, appearing in one episode (the role was later played by Priscilla Presley). In the late 70s she had a stint on Mork & Mindy and then shot to stardom as the resident vixen, Constance Weldon Carlyle, on the prime time soap Flamingo Road. Though the series had an impressive beginning, the ratings soon went down and it was canceled after two seasons. Nevertheless, Fairchild was now a household name and was nominated for a Golden Globe. In 1982 she played Jamie Douglas, a newscaster, in the sexy thriller The Seduction, where her riveting nude scene cemented her position as one of Hollywood's bad girls. In 1984 she headlined another series, Paper Dolls, where critics considered her the only bright spot, but poor ratings doomed the series. By this time she was established as a leading television actress and appeared in the series Falcon Crest. In the early 80s she appeared in off-Broadway plays such as Geniuses and garnered rave reviews from Time and the New York Times. "Tommy Flanagan", a popular recurring character on Saturday Night Live in the mid-1980s played by Jon Lovitz was a pathological liar (catchphrase: "Yeah, that's the ticket") who claimed to be married to Fairchild.

Fairchild garnered an Emmy nomination for her role in a Murphy Brown episode, and in the early 90s Roseanne producers capitalized on her name value and cast her in a small role as Sandra Bernhard's bisexual girlfriend.

In 1995, Fairchild returned to soaps as catty Sydney Chase on The City, for a year. She also made guest appearances on Friends (as Chandler Bing's mother) and was a recurring guest star on Cybill as Andrea, the rival of Cybill Shepherd's character. Through the years, she also maintained a career in independent films and theater productions.

Fairchild's personal life has been more low-key but she was married to Jack Calmes from 1967-1973 and dated US Senator and future Presidential candidate John Kerry in the early '90s. She has been known to have conservative viewpoints (as her guest hosting Bill O'Reilly's radio show points to), but generally leans more libertarian in actual practice.

Fairchild continues to appear regularly on television, and is active in raising awareness of AIDS related issues, and environmental protection. Fairchild is unique in the sense that she has never had a starring role in a successful film or television series. She cultivated an image through her glamour as well as her extremely professional and courteous personality (a contrast from the "divas" she tends to portray). Fairchild scored her biggest recognition in some time by starring in TV ads for the Old Navy clothing store for several years, essentially playing herself.

More recently, Fairchild has starred in the role of Mrs. Robinson in the play adaptation of the film The Graduate. This role drew media attention, as it includes a scene in which Fairchild appeared nude on stage.

In 2005, Fairchild appeared in the American Idol-esque reality show, But Can They Sing? on the VH1 network.