Mulholland is a 1981 graduate of Laurel Highlands (Pennsylvania) High School. He maintains a strong connection to his high school, where his baseball uniform number has been retired. He attended Marietta College in (Ohio) where he majored in sports medicine and played for legendary NCAA Division III coach Don Schaly.
He was a first team All-American his junior season when he was drafted in the first round by the San Francisco Giants. The school's baseball field sits on Mulholland Drive; it was renamed so in 1994 after Mulholland purchased a new lighting system for the field.
Terry is part owner of the Dirty Dogg Saloon, a bar in Scottsdale, Arizona. He has one child with his ex-wife. He remarried on February 14, 2009.
He lists baseball card collecting as one of his hobbies.
Mulholland made his Major League debut on June 8, 1986, with the San Francisco Giants. After that, he played for eleven different Major League teams: the Giants, the Phillies, the Yankees, the Mariners, the Cubs, the Braves, the Dodgers, the Pirates, the Indians, the Twins, and the Diamondbacks.
He is well known for having one of the "nastiest" pickoff moves in the game.
While pitching for the Giants, Mulholland made a play that is often shown on sports bloopers shows. After he grabbed a hard-hit ground ball, the ball got stuck in the webbing of his glove. Mulholland then ran towards first base and tossed his glove to first baseman Bob Brenly, who recorded the out.
On June 18, 1989, the Giants traded Mulholland, Dennis Cook and Charlie Hayes for former Cy Young Award winner Steve Bedrosian and a player to be named later. On August 15, 1990, Mulholland no-hit the Giants 6-0 at Veterans Stadium. In pitching this, the first no-hitter in the stadium's history, Mulholland became the first pitcher to no-hit a former team since the Houston Colt .45s' Ken Johnson did so against the Cincinnati Reds in 1964 (Johnson lost the game 1-0—the only game, to date, whose losing pitcher had pitched a nine-inning no-hitter). He faced the minimum of 27 batters. The only batter to reach base was on a throwing error by Hayes on Rick Parker's ground ball leading off the seventh inning; Parker was retired on Dave Anderson's double play ground ball one batter later. The 27th out was made by Hayes with a lunging catch of Gary Carter's line drive down the 3rd base line. He defeated Don Robinson, who also served up the 500th career home run to Phillies legend, Mike Schmidt, just three years earlier.
Mulholland was named the starter for the 1993 Major League Baseball All-Star Game.
Mulholland started Game 6 for the Phillies in the 1993 World Series versus the Toronto Blue Jays. This game will always be remembered for Mitch Williams giving up the series-ending home run to Joe Carter. Mulholland was also the starting pitcher for the National League in the 1993 All-Star Game played at Camden Yards in Baltimore, Maryland.
Terry was instrumental in the Cubs' 1998 playoff run, pitching in relief and as a starter, often on consecutive days.
At the 1999 trading deadline, the Braves acquired Mulholland along with infielder José Hernández from the Chicago Cubs for Micah Bowie, Rubén Quevedo and a player to be named later. He appeared in 16 games down the stretch with the Braves, going 4-2 with an ERA of 2.98, during a season that the Braves went to the World Series. The next season, Mulholland was used as a spot starter for the Braves, and went 9-9 with a 5.11 ERA in 156.7 innings of work. He became a free agent after the season ended.
While pitching for the Minnesota Twins Mulholland became one of the few players who have beaten every Major League team.
On June 21, 2006, the Diamondbacks waived Mulholland.