By 1937, Moorehead had joined Orson Welles' Mercury Players, as one of his principal performers along with Joseph Cotten. (In an appearance on "The Dick Cavett Show" on February 19, 1973, she revealed that, in 1922, she had by chance met Welles (15 years her junior) when he was a mere seven years old at the Waldorf-Astoria Hotel in New York City.) She performed in his "The Mercury Theatre on the Air" radio adaptations, and had a regular role opposite Welles in the serial "The Shadow" as Margo Lane. In 1939, Welles moved the Mercury Theatre to Hollywood, where he started working for RKO Pictures. Several of his radio performers joined him, and Moorehead made her film debut as the mother of his own character, Charles Foster Kane, in "Citizen Kane" (1941), considered by most film critics as one of the best films ever made. Moorehead was featured in Welles' second film, "The Magnificent Ambersons" (1942), and received the New York Film Critics Award and an Academy Award nomination for her performance. She also appeared in "Journey Into Fear" (1943), a Mercury film production.