His first novel, Bottom Dogs, based on his childhood experiences at the orphanage and his travels in the American West, was published in London with an introduction by D. H. Lawrence. With his advance money, Dahlberg returned to New York City and resided in Greenwich Village. He visited Germany in 1933 and in reaction briefly joined the Communist Party, but left the Party by 1936. From the 1940s onwards, Dahlberg made his living as an author and also taught at various colleges and universities. In 1948, he taught briefly at the experimental Black Mountain College. He was replaced on the staff by his friend and fellow author, Charles Olson.
He was an expatriate writer of the 1920s, a proletarian novelist of the 1930s, a spokesman for a fundamental humanism in the 1940s. For a number of years, Dahlberg devoted himself to literary study. His extensive readings of the works of Dante, Shakespeare, Thoreau and many others resulted in a writing style quite different from the social realism that characterized his earlier writing.
He moved to the Danish island of Bornholm in 1955 while working on The Flea of Sodom. The Sorrows of Priapus was published in 1957, becoming his most successful book thus far. He later moved to Mallorca, while working on Because I Was Flesh, an autobiography which was published in 1964. During the 1960s and 1970s, he became quite prolific and further refined his unique style through the publication of poetry, autobiographical works, fiction and criticism.