Gullstrand studied in Uppsala, Vienna, and Stockholm, earning a doctorate in 1890. He became professor of diseases of the eye at Uppsala in 1894 and in 1913 was appointed professor of physiological and physical optics there.

Gullstrand contributed to knowledge of the structure and function of the cornea and to research on astigmatism. He improved corrective lenses for use after surgery for cataracts and devised the Gullstrand slit lamp, a valuable diagnostic tool that facilitates detailed study of the eye. Gullstrand's investigations led to a new concept of the theory of optical images (optical image). He expanded the classic theory of the German physicist Hermann von Helmholtz to include the redisposition of internal parts of the lens structure in accommodation, a mechanism by which the eye can focus for near or far vision within certain limits. Gullstrand showed that although accommodation depends about two-thirds on the increase in convexity of the lens surface, the remaining one-third does not.