As a youth, Atkinson represented both the Leeds Schoolboys and Yorkshire Schoolboys teams before joining Oldham Athletic as an apprentice in 1977. He was given his first professional contract two years later and made his senior debut on 18 August 1979, scoring in the 2–3 defeat away at Newcastle United. He became a first-team regular for Oldham over the following four seasons and scored a total of 11 goals in 143 league matches for the club. In July 1983, Atkinson was signed by Watford manager Graham Taylor for a transfer fee of £175,000. A broken ankle sustained in pre-season delayed his debut in the First Division. When he returned to action later in the season, he failed to hold down a regular place in the team and played only 11 league games. Atkinson's last appearance for Watford came on 19 May 1984, coming on as a second-half substitute for Neil Price in the 0–2 defeat to Everton in the 1984 FA Cup Final. He spent one more season with the club but did not make a first-team appearance and left in August 1985, returning to Oldham for a fee of £30,000.