Walters was born in Riyadh, Saudi Arabia. Her name is Yoruba meaning fellowship. She is divorced from Nip/Tuck actor Dylan Walsh with whom she shares children Joanna and Thomas.

Frequently cast by Paul Thomas Anderson, she has appeared most notably in Boogie Nights, as Jessie St. Vincent; and Magnolia, as Claudia Wilson Gator. She has also appeared on such television shows as Roseanne, Seinfeld, NYPD Blue, and CSI.

In 2003, she portrayed Lila in Cold Mountain. In 2004 she played Andrea Treborn in the The Butterfly Effect. She guest starred as Sylvia Greene in 2007 on Desperate Housewives. She currently plays the role of Wanda in the HBO drama Big Love.