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The New York Knicks drafted Richardson with the fourth pick overall in the 1978 NBA Draft, and he was billed as "the next Walt Frazier." Two picks later, the Boston Celtics drafted Larry Bird. In his second year, he became the first player in NBA history to lead the league in both assists (10.1) and steals (3.2), setting Knicks franchise records in both categories.
At the beginning of the 1982-83 season, he was sent to the Golden State Warriors as compensation for the New York Knicks signing Bernard King as a free agent. After playing only 33 games for the Warriors, Richardson was traded to the New Jersey Nets. He would be named an all-star as a Net, being a member of the Eastern Conference all-star team that allegedly froze out Michael Jordan. In the 1984 playoffs, Richardson was spectacular, leading the Nets to a shocking upset of the defending champion Philadelphia 76ers. In the fifth and deciding game, Richardson scored 24 points and had six steals. While the Knicks showed mild improvement after trading Richardson, that improvement was short-lived, ending when King was felled by a devastating knee injury midway through the 1984-85 season.
In 1986 NBA commissioner David Stern banned Richardson for life after Richardson violated the league's drug policy three times. Richardson's right to play in the NBA was restored in 1988, but Richardson failed two cocaine tests in 1991, though he disputed the results.