1970s and 1980s

Thompson earned her master's degree in film studies at the University of Iowa (1973) and a Ph.D. in film studies at the University of Wisconsin—Madison. She has held teaching positions at the University of Wisconsin, the University of Iowa, Indiana University, the University of Amsterdam, and the University of Stockholm.

In 1979, she co-wrote the film textbook, Film Art: An Introduction, with husband David Bordwell. Film Art, with a ninth edition published in 2009, was originally published in 1979 and has become a standard in the field of film aesthetics. To date, it has been translated into seven languages.

Thompson predominantly relies on an analytical method drawn from Russian Formalism known as neoformalism. This method formed the basis for her dissertation, which subsequently became her first scholarly book, Eisenstein's "Ivan the Terrible": A Neoformalist Analysis. Neoformalism is also the basis for the later, Breaking the Glass Armor.

1990s and 2000s

In 1994, she co-wrote another textbook with Bordwell, Film History . In early 2001 she did a series of lectures at Oxford University. She holds an honorary fellowship in the Department of Communication Arts at the University of Wisconsin—Madison.

Quality television

Thompson argues that a small number of television shows stand out as quality television shows, due to their use of "...a quality pedigree, a large ensemble cast, a series memory, creation of a new genre through recombination of older ones, self-consciousness, and pronounced tendencies toward the controversial and the realistic" . She claims that television shows such as Twin Peaks, Buffy the Vampire Slayer, The Sopranos, and The Simpsons exhibit traits also found in art films, such as psychological realism, narrative complexity, and ambiguous plotlines.

She notes that David Lynch's Twin Peaks television series have "...a loosening of causality, a greater emphasis on psychological or anecdotal realism, violations of classical clarity of space and time, explicit authorial comment, and ambiguity." She compares Lynch's film Blue Velvet and the television series Twin Peaks and "...asks whether there can be an "art television" comparable to the more familiar "art cinema."

As well, she points out that series such as Buffy the Vampire Slayer, The Sopranos, and The Simpsons "...have altered long-standing notions of closure and single authorship", which means that "...television has wrought its own changes in traditional narrative form." She states that The Simpsons, use a "...flurry of cultural references, intentionally inconsistent characterization, and considerable self-reflexivity about television conventions and the status of the programme as a television show."

Lord of the Rings

In the mid-2000s, Thompson's interest in Hollywood norms led her to write a monograph about the popular fantasy trilogy The Lord of the Rings: The Frodo Franchise: The Lord of the Rings and Modern Hollywood. This book "...examine[s] the larger phenomenon of this hugely successful franchise, examining the film’s making but also its marketing via the Internet, its merchandising (particularly DVDs and video games), and its impact on world cinema." It is based on the author's interviews with many of the artists, writers, and business people who participated in the making of The Lord of the Rings motion pictures.