While working at Jimmy's Music Shop in Manhattan in 1966, Baxter met guitarist Jimi Hendrix, who was just beginning his career as a frontman. For a short period during that year, Baxter was a member of a Hendrix-led band called Jimmy James and the Blue Flames, along with Manny's employee Randy California. Jeff also worked as a guitar tech and amplifier repairman at the long-defunct "Jack's" Drum shop on 252 Boylston Street in Boston across from the frog pond as well as for the great guitar inventor, Dan Armstrong, also on 48th St in Manhattan.
Baxter graduated from The Taft School in Watertown, Connecticut and attended the School of Public Communication (now College of Communication) at Boston University, entering as a freshman in September 1967, where he studied journalism and continued his work with local Boston bands.
Baxter first reached the larger rock audience in 1968 as a member of the psychedelic rock band Ultimate Spinach. Baxter joined that band for their third and final album, titled III. He then went on to play with the Holy Modal Rounders, a stint on bass with Tim Buckley, followed by recording and touring with Buzzy Linhart.
WITH STEELY DAN
After the breakup of Ultimate Spinach, Baxter relocated to Los Angeles, California, finding work as a session guitarist. In 1972 he became a founding member of the band Steely Dan, along with guitarist-bassist Walter Becker, keyboardist Donald Fagen, guitarist Denny Dias, drummer Jim Hodder and vocalist David Palmer. Becker and Fagen were employed at the time as staff songwriters for ABC Records, and they formed the band as a vehicle to promote their songs.
Baxter appeared with Steely Dan on their first three albums, Can't Buy a Thrill in 1972, Countdown to Ecstasy in 1973, and Pretzel Logic in 1974. Among his contributions were guitar solos on the 1974 hit single "Rikki Don't Lose That Number" and "My Old School.
WITH THE DOOBIE BROTHERS
While finishing work on Pretzel Logic, Baxter became aware of Becker and Fagen's intentions to retire Steely Dan from touring, With that in mind, Baxter left the band in 1974 to join The Doobie Brothers, who at the time were touring in support of their fourth album What Were Once Vices Are Now Habits. As a session man, he played on Vices as well as playing pedal steel on "South City Midnight Lady" on its predecessor, The Captain and Me. Baxter's first album as a full member of the group was 1975's Stampede. Baxter contributed an acoustic interlude entitled "Precis," significant turns on slide and pedal steel guitar, and the guitar solo for the hit single "Take Me In Your Arms (Rock Me A Little While)".
While preparing to tour in support of Stampede, Doobie Brothers founder Tom Johnston was hospitalized with a stomach ailment. To fill in for Johnston on vocals, Baxter suggested bringing in singer-keyboardist Michael McDonald, with whom Baxter had worked in Steely Dan. With Johnston still convalescing, McDonald soon was invited to join the band full-time. McDonald's vocal and songwriting contributions, as well as Baxter's eclectic guitar style, marked a new direction for the band. They went on to continued success with the 1976 album Takin' It to the Streets, 1977's Livin' on the Fault Line, and particularly 1978's Minute by Minute, which spent five weeks as the #1 album in the U.S., received 6 Grammys and spawned several hit singles; Baxter's work on the album includes a noted performance at the end of "How Do the Fools Survive?".
In early 1979, Baxter and co-founding drummer John Hartman left the band.
POST-DOOBIE BROTHERS MUSIC CAREER
Baxter has continued working as a session guitarist for a diverse group of artists, including Willy DeVille, Bryan Adams, Hoyt Axton, Eric Clapton, Gene Clark, Joni Mitchell, Freddie Hubbard, Harry Nilsson, Joni Mitchell, Rick Nelson, Dolly Parton, Carly Simon, Ringo Starr, Gene Simmons, Rod Stewart, Barbra Streisand, and Donna Summer. He has worked as a touring musician with Elton John and Linda Ronstadt. He played pedal steel with Billy Vera and the Beaters and produced their first album, which was recorded live at the Roxy in LA and contained the #1 single, "At This Moment". In 1990, Baxter formed a band called "The Best" with John Entwistle, Joe Walsh, Keith Emerson, Rick Livingston and Simon Phillips for a one-time tour of Japan, after which the group released a live performance video. He also produced albums for the hard rock band Nazareth, The Stray Cats, Carl Wilson, The Ventures, Nils Lofgren and Bob Welch's 1982 album, "Eye Contact". He also appeared in the film Blues Brothers 2000 and can be heard on the cast album. In 1994 Baxter performed on the video game Tuneland, one of the first video games for children, along with other artists like David Gilmore from Pink Floyd and Jon Anderson from Yes. In 1991 Baxter also produced a documentary video titled 'Guitar' (Warner Brothers VHS and LaserDisc) where he travels the world to interview and perform with respected and well-known guitarists, many of whom are personal friends.
He continues accepting studio work; his most recent such work involved tribute albums to Pink Floyd and Aerosmith. He also occasionally plays in The Coalition of the Willing, a band comprising Andras Simonyi, former Hungarian Ambassador to the United States; Alexander "Sandy" Vershbow, Ass't Secretary of Defense for International Security Affairs; Daniel B. Poneman, formerly of the United States National Security Council and now Deputy Director of the US Department of Energy and Lincoln Bloomfield, former United States Assistant Secretary of State for Political-Military Affairs. On June 19, 2007, Baxter jammed with former White House Press Secretary and close friend Tony Snow's band Beats Workin at the Congressional Picnic held on the South Lawn of the White House.
DEFENSE CONSULTING CAREER
Baxter fell into his second profession almost by accident. In the mid-1980s, Baxter's interest in music recording technology led him to wonder about hardware and software that was originally developed for military use, i.e. data-compression algorithms and large-capacity storage devices. As it happened, his next-door neighbor was a retired engineer who had worked on the Sidewinder missile program. This neighbor bought Baxter a subscription to an aviation magazine, provoking his interest in additional military-oriented publications and missile defense systems in particular. He became self-taught in this area, and at one point he wrote a five-page paper that proposed converting the ship-based anti-aircraft Aegis system into a rudimentary missile defense system. He gave the paper to California Republican congressman Dana Rohrabacher, and his career as a defense consultant began.
Backed by several influential Capitol Hill lawmakers, Baxter received a series of classified security clearances. In 1995, Pennsylvania Republican congressman Curt Weldon, then the chairman of the House Military Research and Development Subcommittee, nominated Baxter to chair the Civilian Advisory Board for Ballistic Missile Defense.
Baxter's work with that panel led to consulting contracts with the Pentagon's Missile Defense Agency (MDA) and National Geospatial-Intelligence Agency. He now consults to the U.S. Department of Defense and the U.S. intelligence community, as well as for defense-oriented companies including Science Applications International Corporation ("SAIC"), Northrop Grumman Corp. and General Dynamics Information Technologies. He has been quoted as saying his unconventional approach to thinking about terrorism, tied to his interest in technology, is a major reason he became sought after by the government.
"We thought turntables were for playing records until rappers began to use them as instruments, and we thought airplanes were for carrying passengers until terrorists realized they could be used as cruise missiles," Baxter has said. "Among other things, what I do is look at existing technologies and hypothesize how they might be applied in non-traditional ways, something that happens in music all the time and also happens to be something that terrorists are incredibly good at."Baxter has also appeared in public debates and as a guest on CNN and Fox News Channel advocating missile defense and discussing terrorism.
In April 2005, he joined the NASA Exploration Systems Advisory Committee (ESAC). Baxter was a member of an independent study group that produced the "Civil Applications Committee Blue Ribbon Study" recommending an increased domestic role for U.S. satellites in the war against terrorism in September 2005.
 This study was first reported by the Wall Street Journal on August 15, 2007. Baxter is listed as Senior Thinker at the Florida Institute for Human and Machine Cognition. Baxter is a Senior Fellow and Member of the Board of Regents at the Potomac Institute for Policy Studies  and a member of the Director's Strategic Red Team at MIT Lincoln Labs.