Benedict's film debut was in the 1972 film Georgia, Georgia, which was entered into the 23rd Berlin International Film Festival. When the New York run for Butterflies Are Free ended, he received an offer to repeat his performance in Hawaii, opposite Barbara Rush. While there, he appeared as a guest lead on Hawaii Five-O. The producers of a horror film called Ssssss saw Benedict's performance in Hawaii Five-O and promptly cast him as the lead in that movie. He next played the psychotic wife-beating husband of Twiggy in her American film debut, W. Benedict starred in the television series Chopper One which aired for one season in 1974. He also made an appearance in Charlie's Angels.

Benedict's career break came in 1978 when he appeared as Lieutenant Starbuck in the movie and television series Battlestar Galactica.

Four years later, Dirk gained further popularity as con-man Lieutenant Templeton "Face" Peck in 1980s action television series, The A-Team. He did not appear in the pilot film - creators Stephen J. Cannell and Frank Lupo had wanted him from the beginning, but the network executives insisted that they wanted a different sort of actor in the role. Tim Dunigan won the part; but upon completion of the pilot, the executives decided that he wasn't quite right for the role, and it was given to Benedict. He played "Faceman" from 1982 to 1986 (although the series didn't air until January 1983, and the final episode wasn't shown until 1987 re-runs). In the opening credits, the character is seen looking bemused as a Cylon walks by him - an in-joke to his previous role in Battlestar Galactica.

Benedict made a cameo appearance in the 2010 film remake of The A-Team.

In 1987, Benedict took the title role of Shakespeare's Hamlet at the Abbey Theatre. Both his performance and the entire play were drubbed by critics. In 2010, Dirk starred in "Prescription: Murder" playing Lieutenant Columbo along with Patrick Ryecart and George Telfer.

In 1993 Benedict starred in Shadow Force. In 2000, Benedict wrote and directed his first screenplay, Cahoots. In 2005 he played an impostor, pretending to be an 80s moviestar who wants to moderate a charity performance. Goldene Zeiten (Times of Gold) by Peter Thorwardt. 1989 saw Benedict in the T.V. movie Trenchcoat in Paradise

Dirk appeared as a contestant on the 2007 UK series of Celebrity Big Brother. He arrived on the first night in a replica of the A-Team Van, smoking a cigar and accompanied by the A-Team theme tune. Dirk finished in third place overall.

Benedict was born in Helena, Montana, the son of Pricilla Mella (née Metzger), an accountant, and George Edward Niewoehner, a lawyer. He grew up in White Sulphur Springs, Montana. In 1986, he married Toni Hudson, an actress (who had previously appeared in the fourth season A-Team episode "Blood, Sweat and Cheers" as Dana), with whom he has two sons, George and Roland. They divorced in 1995. In 1998, Benedict learned that he also has another son, John (born 1968), from a youthful relationship.

Benedict is a macrobiotic follower.

In 1975, Benedict was diagnosed with prostate cancer by an Italian psychic to whom he sent Polaroid photos, and was told that the cure would be castration. However, he never sought a diagnosis or treatment from a licensed medical professional. He rented a cottage and chose a life of seclusion and decided to commit to a macrobiotic diet and physical training along with fasting instead of going for the operation. He published a book on his experience called Confessions of a Kamikaze Cowboy to give more public awareness of the other treatment.