She had worked a lot on Broadway since 1940. When Dorothy McGuire went to Hollywood, Phyllis replaced her in the play Claudia. In 1944, she signed a contract with Metro-Goldwyn-Mayer. Her first movie was with Van Johnson in the wartime movie "Thirty Seconds Over Tokyo". Thaxter played Joan Alris Ellis, a woman suffering from split personality in the movie "Bewitched" in 1945. In 1948, she played a cattle owner's daughter alongside Barbara Bel Geddes in "Blood on the Moon". 