Baxter, 62, has been married to three men, but the marriages all ended in divorce. The real-life mother of five adult children is best known for her work on the 1980s sit-com "Family Ties."
"I'm a lesbian mom," she told People, adding that until several years ago being gay "had never crossed my mind."
The actress, who also runs a skincare company, admitted coming to terms with who she is was not an easy process.
"I was never comfortable with myself," she explained. "That doesn't mean I was questioning."
Baxter went on to say she has been living with building contractor Nancy Locke for the past two years.
"I feel like I'm being honest for the first time," she told the magazine.