Kohut's reputation as rabbi and scholar had preceded him and he was warmly welcomed. He became involved in the struggle between the traditionalists and Reform. Out of this controversy came his Ethics of the Fathers (1885, 1920), which established the traditionalists' position. Kohut played a major role in the establishment of the Jewish Theological Seminary and taught Midrash and talmudic methodology there. He was one of the first scholars to write about the Yemenite Midrashim, in his Notes on…Commentary to the Pentateuch…by Aboo Manzûr al-Dhamâri… (1892).

His greatest work was the Arukh ha-Shalem (8 vols., 1878–92), a lexicon of talmudic terms which Solomon Schechter called "the greatest and finest specimen of Hebrew learning ever produced by a Jew on this continent." In form it is a new scholarly edition of the Arukh of Nathan b. Jehiel of Rome, but in fact it is a path-finding contribution to talmudic philology in which Kohut offers etymologies and additional sources which exhibit his wide knowledge of Oriental and classical languages. In his introduction he investigated the sources of the Arukh, the biographies of its author's teachers, and the quotations therefrom mentioned in the works of early and late commentators. With every entry in the Arukh ha-Shalem, there is a German translation of the title, as well as an etymological explanation of the words. This was followed by proofs and a discussion on the different versions found in the manuscripts. Kohut shows a special preference for Persian and he enlarges on the etymological presentations from that language. A volume of supplementary comments, Tosefet Arukh ha-Shalem (1937), was prepared by Samuel Krauss, Bernhard Geiger, Louis Ginzberg, Immanuel Loew, and Benjamin Murmelstein. In the Tosefet Arukh ha-Shalem, some of the exaggerated presentations of the Arukh ha-Shalem were corrected by B. Geiger (for example, in the entry anbag, which Kohut derives from the Persian, Geiger notes that this is etymologically inadmissible). The derivations from the Greek were also corrected in many cases by the editors of the Tosefet…. In arranging the entries, Kohut did not show a consistency in the spelling of words, and this is at times a source of difficulty in finding required entries. His etymological work in another field consisted of a critical discussion on the translation of the Torah into Persian by Jacob b. Joseph Tavus (Leipzig, 1871).