Carter began his career at Time as a writer-trainee where he met Andersen, and spent five years writing for the magazine in the topics of business, law, and entertainment before moving to Life in 1983. Carter was then editor at the New York Observer before being invited to Vanity Fair to take over from Tina Brown, who left for The New Yorker. He has been the editor since July 1992, with successes during his tenure including winning ten National Magazine Awards.

's Vanity Fair has been notable for combining high-profile celebrity cover stories with serious journalism. His often idiosyncratic personal style was depicted in the book How to Lose Friends and Alienate People, a book by former Vanity Fair contributing editor Toby Young. Jeff Bridges played a character based on Carter in the 2008 film adaptation.

In addition to print journalism, Carter was a producer of Chicago 10, a documentary which premiered on the opening night of the Sundance Film Festival in early 2007. He was also a producer of Surfwise, which premiered at the Toronto International Film Festival in September 2007, and Gonzo, a biographical documentary of Hunter S. Thompson directed by Alex Gibney.

Carter was an executive producer of 9/11, the highly acclaimed film by Jules and Gedeon Naudet about the September 11 terrorist attacks, which aired on CBS. Carter received an Emmy Award for 9/11, as well as a Peabody Award. He also produced the acclaimed documentary adaptation of the book The Kid Stays in the Picture, about the legendary Hollywood producer Robert Evans. It premiered at the 2002 Sundance Film Festival, screened at the 2002 Cannes Film Festival, and opened in theaters in July of that year.

Carter was born in Toronto. He has been married three times. His first wife was a Canadian; the marriage was dissolved before Carter moved to the United States at the age of 28. His second marriage, to Cynthia Williamson, lasted 18 years and produced four children. The couple divorced in 2000. Carter married Anna Scott in 2005. They have a daughter.

Carter has identified himself as a libertarian: "I don't vote. I find both parties to be appalling and OK at the same time. I find it harder for anybody as they get older to feel 100 per cent strongly behind one party. There's lots more grey than when I was younger. I'm a libertarian."

Carter currently resides in Manhattan, New York and Roxbury, Connecticut. He is co-owner of two popular Manhattan restaurants, the Waverly Inn, a restaurant in New York City's West Village and the Monkey Bar on East 54th Street.