A naturalized U.S. citizen (1916), Waksman spent most of his career at Rutgers University, New Brunswick, New Jersey, where he served as professor of soil microbiology (1930–40), professor of microbiology and chairman of the department (1940–58), and director of the Rutgers Institute of Microbiology (1949–58). During his extensive study of the actinomycetes (actinomycete) (filamentous, bacteria-like microorganisms found in the soil), he extracted from them antibiotics (antibiotic) (a term he coined in 1941) valuable for their killing effect not only on gram-positive bacteria, against which penicillin is effective, but also on gram-negative bacteria, of which the tubercle bacillus (Mycobacterium tuberculosis) is one.

In 1940 Waksman, along with Albert Schatz and Elizabeth Bugie, isolated actinomycin from soil bacteria but found it to be extremely toxic when given to test animals. Three years later they extracted the relatively nontoxic streptomycin from the actinomycete Streptomyces griseus and found that it exercised repressive influence on tuberculosis. In combination with other chemotherapeutic agents, streptomycin has become a major factor in controlling the disease. Waksman also isolated and developed several other antibiotics, including neomycin, that have been used in treating many infectious diseases of humans, domestic animals, and plants.

Among Waksman's books are Principles of Soil Microbiology (1927), regarded as one of the most exhaustive works on the subject, and My Life with the Microbes (1954), an autobiography.