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 Denny Dias, guitarist-bassist Walter Becker, keyboardist Donald Fagen, drummer Jim Hodder and vocalist David Palmer (and session player Elliott Randall on various tracks). 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 was the guitar solo on the 1974 hit single "Rikki Don't Lose That Number".
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