Director Dasari Narayana Rao gave her a starring role in the Telugu film Thoorupu Padamara when she was a teenager. The film became a huge hit. K. Balachander then cast her in a supporting role in his Telugu film Maro Charithra (1978). She reprised her role in its Hindi remake Ek Duje Ke Liye (1981), which became the top grossing film of 1981. In both films, she showed remarkable sensitivity as a lonely wealthy woman who falls in love with Kamal Haasan's character. She earned a Filmfare Award nomination as Best Supporting Actress. K. Balachander was so impressed with her performance in both films that he introduced her to the Tamil film industry with Thillu Mullu (1981) opposite Rajinikanth. By the end of the decade, she was starred opposite superstar Amitabh Bachchan in the Hindi film Agneepath (1990).
Madhavi acted alongside Kamal Haasan in Raja Paarvai, Tik Tik Tik, Kaakki Sattai and Mangamma Sabadham appearing in a swimsuit in all the films. Her films with Rajinikanth include Garjanai, Thambikku Entha Ooru, Un Kannil Neer Vazhindal and Viduthalai. She showed her ability in movies like Enga Oor Kannagi, Needhi Dhevan Mayakkam and Nirabaraadhi.
She acted in a number of films with Telugu star Chiranjeevi. Her first movie with Chiranjeevi was Intlo Ramaiah Veedhilo Krishnaiah in 1982. She acted again with Chiranjeevi in the movie Khaidi. Her last movie in Telugu was Big Boss (another Chiranjeevi film).
She acted in a number of Kannada movies alongside popular Kannada heroes including Rajkumar, Vishnuvardhan, Anant Nag and Ambareesh. Her performance in Haalu-Jenu was widely acclaimed.
She also appeared in many Malayalam movies with superstars Mammootty and Mohanlal. Her portrayal of Unniyaarcha in the National Award-winning movie Oru Vadakkan Veeragadha was critically appreciated. Her portrayal as a mother who met her end with leukemia in Akashadoothu won her Filmfare Award for Best Actress for 1993.