Chandrasekhar worked on a wide variety of problems in physics during his lifetime, contributing to the contemporary understanding of stellar structure, white dwarfs, stellar dynamics, stochastic process, radiative transfer, the quantum theory of the hydrogen anion, hydrodynamic and hydromagnetic stability, turbulence, equilibrium and the stability of ellipsoidal figures of equilibrium, general relativity, mathematical theory of black holes and theory of colliding gravitational waves.

He developed a theoretical model explaining the structure of white dwarf stars that took into account the relativistic variation of mass with the velocities of electrons that comprise their degenerate matter. He showed that the mass of a white dwarf could not exceed 1.44 times that of the Sun – the Chandrasekhar limit.

Chandrasekhar revised the models of stellar dynamics by considering the effects of fluctuating gravitational fields within the Milky Way on stars rotating about the galactic centre. His solution to this complex dynamical problem involved a set of twenty partial differential equations, describing a new quantity he termed "dynamical friction", which has the dual effects of decelerating the star and helping to stabilize clusters of stars.

Chandrasekhar extended this analysis to the interstellar medium, showing that clouds of galactic gas and dust are distributed very unevenly.