His first starring role was as the Cisco Kid in In Old Arizona (1929), for which he won the Academy Award for Best Actor. By 1936, his was the highest salary for an actor in Hollywood, but by 1943, he had slipped to B movie roles, and he began to star in a series of Crime Doctor films.
Suffering the pain of arthritis, Baxter had a lobotomy to ease the pain. He died shortly after of pneumonia.
He has a star on the Hollywood Walk of Fame at 6290 Hollywood Blvd.