Throughout the eighties, Dinah found herself in a variety of roles both in the movies and on Broadway. She won a Tony for Best Actress in 1980 for her portrayal of Libby Tucker in the Neil Simon play "I Ought to Be in Pictures" and revised the role for the film version alongside Walter Matthau and Ann-Margaret. She had small parts in such films as Child's Play, Welcome Home Roxy Carmichael, Staying Together, and the Academy Award winning Ordinary People throughout the decade before landing the role for which she is probably best known in 1988: neurotic Carol Weston on the sitcom Empty Nest. Dinah played angsty Carol for seven seasons on the hit series which ran from 1988 to 1995.

A spinoff of the popular Golden Girls, Empty Nest was an instant Top 10 hit, reuniting Dinah with her Soap costar Richard Mulligan and marking the return of Kristy McNichol to series television. Throughout the show's run, Dinah continued to act in feature films, plays, and made-for-television movies. She also tried her hand at writing and directing, serving as cowriter and executive producer (as well as star) of the 1992 made-for-television movie Maid For Each Other alongside Nell Carter. She won a 1993 Dramalogue Award for directing the play "Telegrams from Heaven," which she also cowrote, and began directing episodes of Empty Nest in 1992. When Nest ended in 1995, Dinah made guest appearances on shows like Touched By An Angel and Cybill, but focused largely on directing. She has directed a variety of sitcoms including Sister,Sister and Brother's Keeper.

In 1997, married to second husband Arthur Mortell, Dinah gave birth to son Dashiell and contributed to Pregnant Goddesshood by Mary Ann Halpin, a book of photos and essays written by pregnant women. In 1998, as Grease celebrated it's 20th anniversary, Dinah joined in the celebration and contributed to Frency's Grease Scrapbook by her costar Didi Conn. In 2000, Dinah starred in the film The Amati Girls alongside her mother Lee Grant. In the summer of 2001, she was back on the small screen in the ABC Family Channel original series State of Grace, a critically acclaimed dramedy set in 1960s North Carolina. The series lasted two seasons before being cancelled in 2002 by the cable network. In January of the same year, having spent much of State of Grace's second season hiding behind pillows and purses, Dinah gave birth to twin boys. She was back to work in 2003, starring with Tori Spelling in the Hallmark Channel's holiday movie A Carol Christmas. She also participates in Spoken Interludes(TM), a monthly salon open to the public of dinner and readings from award-winning, best-selling, and up-coming writers reading their own work. Dinah has participated every year since the salon began in 1996.