Kidder, one of five children, was born in Yellowknife, Northwest Territories, the daughter of Jocelyn Mary "Jill" (nee Wilson), a history teacher, and Kendall Kidder, an explosives expert and engineer. Kidder also spent time growing up in Labrador City, Newfoundland and Labrador. Her mother was from British Columbia, Canada, and her father was from New Mexico, United States. She is of Welsh and English descent.

In 1975, Kidder was cast in a lead role in The Great Waldo Pepper opposite Robert Redford, she also appeared in The Reincarnation of Peter Proud and 92 in the Shade (1975) with Peter Fonda, all of which established her as a commercially viable leading lady. Kidder famously married the director of 92 in the Shade, Thomas McGuane. She appeared on the March 9, 1975 edition of The American Sportsman, learning how to hang glide with her providing the narration and a remote microphone recording her reactions in flight; the segment concluded with Kidder doing solos soaring amid the Wyoming Rockies.  After taking a break from acting after the birth of her daughter in 1976, Kidder sought to return to making films in the late 1970s. After doing a reading of Lois Lane for the 1978 superhero film Superman: The Movie, Kidder was flown to England by Richard Donner for screen-tests. Donner ultimately cast Kidder in the role, which would become her most iconic. Filming took over a year, and the film was released during Christmas 1978, to major commercial success. Kidder won a Saturn Award for best actress for her performance in the film. Kidder publicly disagreed with the decision of producers Alexander Salkind and Ilya Salkind to replace Richard Donner as director for Superman II (1980). It was reported that as a result, Kidder's role in Superman III (1983) consisted of less than five minutes of footage, though the producers have denied this in DVD commentaries. Her role in Superman IV: The Quest for Peace (1987) was more substantial.  Kidder's performance as Kathy Lutz in the 1979 summer release of The Amityville Horror further cemented her status as one of Hollywood's leading ladies. Though it received mixed reviews from critics, The Amityville Horror was a major commercial success, grossing over $86 million in the United States. Janet Maslin of The New York Times, though giving the film a mixed review, said Kidder "stubbornly remains the bright-eyed life of the party [in the film]." In retrospect, Kidder called the film "a piece of shit." The same year, Kidder hosted an episode of the American sketch comedy TV show Saturday Night Live.

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Kidder was flown to England by Richard Donner for screen-tests. Donner ultimately cast Kidder in the role, which would become her most iconic.