Since the early 1980s, Olson has been virtually retired from acting, although she has made a few rare returns, most recently in 2012.
Olson was signed to a film contract by Paramount Pictures in 1948 and, after a few supporting roles, producers began to consider her for more prominent parts. She was up for the role ofDelilah in Cecil B. DeMille's 1949 film Samson and Delilah, for which Olson later said she was not suited. When she was passed over in favor of Hedy Lamarr, Billy Wilder cast her for his upcoming project. In Sunset Boulevard (1950) she played Betty Schaefer, for which she garnered an Academy Award nomination for Best Supporting Actress. Her pairing with William Holdenwas considered a success and she appeared with him in three other films (Force of Arms, Union Station, and Submarine Command, all released in 1951), but none repeated their success inSunset Boulevard. Other film credits include Big Jim McLain (1952), So Big (1953), Battle Cry (1955), and Dumbbells (2014).
Olson made several appearances in films for the Walt Disney studio. The Absent-Minded Professor and Son of Flubber paired her with Fred MacMurray and were popular with movie-goers. She also appeared alongside Hayley Mills in Pollyanna and Dean Jones in Snowball Express. Olson then moved to New York City where she appeared on Broadway.
Throughout the 1960s and 1970s, she did guest roles on television, and has been retired since the mid-1980s, although she made a brief, uncredited appearance in Flubber, the 1997 remake of The Absent-Minded Professor.
In 1962 she married longtime Capitol Records executive Alan W. Livingston, best known for creating "Bozo the Clown" and for signing Frank Sinatra and The Beatles, among other legends, with Capitol. He died in 2009; they had one son, Christopher.