Cage began writing about sex and culture in the 1990s while interning under editor Lisa Palac at the San Francisco-based magazine Future Sex. In 2000, Cage's editorial work and extensive writing on sex and sexuality converged when she was hired as editor at the landmark lesbian sex magazine On Our Backs. During her tenure there, Cage operated the magazine according to her radical beliefs about sex and sexual identity, expanding rather than policing the magazine's vision of what constituted lesbian sex. Erstwhile publisher of both On Our Backs and Girlfriends , Heather Findlay, praised Cage's "lack of self censorship" as an editor, saying, "[Cage] is not uptight about all forms of lesbian sexual expression. She really has no prejudgments about alternative sexuality." Cage has likewise been praised as an "unapologetic pioneer" in the evolution of progressive, sex-positive lesbian culture.

Cage resigned as editor in 2005, after editing a number of On Our Backs anthologies. The Publishing Triangle named Cage's On Our Backs Guide to Lesbian Sex one of the Most Notable Books of 2004.

In 2004 Cage published Box Lunch: A Layperson's Guide to Cunnilingus, which was nominated for an IPPY award. Subsequent book-length publications include Threeways: Fulfill Your Ultimate Fantasy, and Girl Meets Girl: A Dating Survival Guide. She is also the editor of two anthologies of erotic fiction and both her fiction and nonfiction writing has been included in many anthologies, journals and magazines. She has been a regular columnist for several magazines including Girlfriends, Kitchen Sink, Shewired, Frontiers, Good Vibes, Ourchart, and Velvetpark. In 2008 Cage was named one of GO magazine's 100 Women We Love.

Her newest work, A Woman's Guide to Sexual Ecstasy is part sex instruction and part cultural analysis, emphasizing the role that sexual liberation plays in a woman’s ability to enjoy sex. Beginning with a brief historical overview, the book discusses the history of female sexual repression and liberation. Cage argues that women don't own their own bodies in a patriarchy and are therefore cut off from their libidos and ability to receive pleasure in sex.

In 2007 Cage became the host of The Diana Cage Show on Sirius Satellite Radio's SIRIUS OutQ, the first lesbian-hosted radio show on the only national LGBT radio station in the United States. Celebrated for Cage's bombastic monologues, incisive commentary on current events, and unflinching advice on love and sex, the show ran for two years, ending in January 2009. Cage currently appears as a guest and fill-in host on the same channel.

Cage is currently managing editor at Velvetpark, an integrated social network featuring blogs, news, video content and an exclusive lesbian dating network.