His works were often controversial, both for their frank description of sexuality (Sigmund Freud, in a letter to Schnitzler, confessed "I have gained the impression that you have learned through intuition - though actually as a result of sensitive introspection - everything that I have had to unearth by laborious work on other persons") as well as for the strong stand against anti-Semitism represented by works such as Professor Bernhardi and Der Weg ins Freie. (Interestingly, however, although Schnitzler was himself Jewish, "Professor Bernhardi" is the only one of his works with a clearly-identified Jewish protagonist; in the second, the hero has many Jewish friends, but is a non-Jew himself.) Schnitzler was branded as a pornographer after the release of his play Reigen, and his works were later cited as an example of "Jewish filth" by Adolf Hitler. (Reigen was made into a French language film in 1950 by the German-born director Max Ophuls under the title La Ronde. The film achieved considerable success in the English-speaking world, with the result that Schnitzler's play is better known there under the French title Ophuls used.) In response to an interviewer who asked Schnitzler what he thought about the critical view that his works all seemed to treat the same subjects, he replied, "I write of love and death. What other subjects are there?"

Despite his seriousness of purpose, Schnitzler frequently approaches the bedroom farce in his plays. Professor Bernhardi, a play about a Jewish doctor who turns away a Catholic priest in order to spare a patient realization that she is on the point of death, and who as a result is forced out of the cooperative clinic he helped found and given two months in jail, is his only major dramatic work without a sexual theme.

A member of the avant garde group Young Vienna (Jung Wien), Schnitzler toyed with formal as well as social conventions. With his 1900 short story "Lieutenant Gustl," he was the first to write German fiction in stream-of-consciousness narration. ("Lieutenant Gustl"'s unflattering portrait of its protagonist and of the army's obsessive code of formal honor caused Schnitzler to be stripped of his commission as a reserve officer in the medical corps - something that must be seen against the rising tide of anti-semitism of the time.) He specialized in shorter works like novellas and one-act plays, and in short short stories like "The Green Tie" (Die grüne Krawatte) he showed himself to be one of the early masters of microfiction. However he wrote two full-length novels, "Der Weg ins Freie" a novel about a talented but not very motivated young composer that gives a brilliant description of a segment of pre-World War I Viennese society, and the artistically less satisfactory Therese.

In addition to his plays and fiction, Schnitzler meticulously kept a diary from the age of 17 until two days before his death, of a brain hemorrhage in Vienna. The manuscript, which runs to almost 8,000 pages, is most notable for Schnitzler's casual descriptions of sexual conquests. Collections of Schnitzler's letters have also been published.