Jespersen was a professor of English at Copenhagen University from 1893 to 1925. Along with Paul Passy, he was a founder of the International Phonetic Association. He was a vocal supporter and active developer of international auxiliary languages. He was involved in the 1907 delegation that created the auxiliary language Ido, and in 1928, he developed the Novial language, which he considered an improvement over Ido. Jespersen collaborated with Alice Vanderbilt Morris to develop the research program of the International Auxiliary Language Association (IALA), which in 1951 presented Interlingua to the general public. Edward Sapir and William Edward Collinson also collaborated with Morris.

He advanced the theories of Rank and Nexus in Danish in two papers: Sprogets logik (1913) and De to hovedarter af grammatiske forbindelser (1921). Jespersen in this theory of ranks removes the parts of speech from the syntax, and differentiates between primaries, secondaries, and tertiaries; e.g. in "well honed phrase," "phrase" is a primary, this being defined by a secondary, "honed", which again is defined by a tertiary "well". The term Nexus is applied to sentences, structures similar to sentences and sentences in formation, in which two concepts are expressed in one unit; e.g., it rained, he ran indoors. This term is qualified by a further concept called a junction which represents one idea, expressed by means of two or more elements, whereas a nexus combines two ideas. Junction and nexus proved valuable in bringing the concept of context to the forefront of the attention of the world of linguistics.

He was most widely recognized for some of his books. Modern English Grammar on Historical Principles (1909-1949), concentrated on morphology and syntax, and Growth and Structure of the English Language (1905) is a comprehensive view of English by someone with another native language, and still in print, over 60 years after his death and nearly 100 years after publication. Late in his life he published Analytic Syntax (1937), in which he presents his views on syntactic structure using an idiosyncratic shorthand notation. In The Philosophy of Grammar (1924) he presented he challenged the accepted views of common concepts in Grammar and proposed corrections to the basic definitions of grammatical case, pronoun, object, voice etc., and developed further his notions of Rank and Nexus. In the 21st century this book is still used as one of the basic texts in modern Structural linguistics. Mankind, Nation and Individual: from a linguistic point of view (1925) is one of the pioneering works on Sociolinguistics.

More than once Otto Jespersen was invited to the U.S. as a guest lecturer, and he took occasion to study the country's educational system. His autobiography (see below) was published in English translation as recently as 1995.

Jespersen was a proponent of phonosemanticism and wrote: “Is there really much more logic in the opposite extreme which denies any kind of sound symbolism (apart from the small class of evident echoisms and ‘onomatopoeia’) and sees in our words only a collection of accidental and irrational associations of sound and meaning? ...There is no denying that there are words which we feel instinctively to be adequate to express the ideas they stand for.”

He appears as a character in Joseph Skibell's 2010 novel A Curable Romantic.

• 1889: The articulations of speech sounds represented by means of analphabetic symbols. Marburg: Elwert.
• 1894: Progress in Language. London: Swan Sonnenschein & Co.
• 1905: Growth and Structure of the English Language (ISBN 0-226-39877-3)
• 1909-1949: A Modern English Grammar on Historical Principles (in seven volumes; the title should be understood as 'A grammar of Modern English') originally published by Carl Winter, Heidelberg, later vols. by Ejnar Munksgard, Copenhagen and George Allen & Unwin, London (ISBN 0-06-493318-0) (Vols. 5-7, issued without series title, have imprint: Copenhagen, E. Munksgaard, 1940-49; Imprint varies: Pt.5-6: London: Allen & Unwin; pt.7: Copenhagen: Munksgaard, London: Allen & Unwin.)
• 1922: Language: Its Nature, Development, and Origin (ISBN 0-04-400007-3)
• 1924: The Philosophy of Grammar (ISBN 0-226-39881-1)
• 1925: Mankind, nation and individual: from a linguistic point of view. H. Aschehoug (det Mallingske bogtryk.), 1925
• 1928: An International Language (the introduction of the Novial language)
• 1930: Novial Lexike Novial to English, French and German dictionary.
• 1937: Analytic Syntax (ISBN 0-226-39880-3)
• 1938: En sprogmands levned, Copenhagen, Jespersen's autobiography
• 1993. A literary miscellany: proceedings of the Otto Jespersen Symposium April 29-30, edited by Jørgen Erik Nielsen and Arne Zettersten 1994
• 1995: A Linguist's Life: an English translation of Otto Jespersen's autobiography, edited by Arne Juul, Hans Frede Nielsen and Jørgen Erik Nielsen, Odense (ISBN 87-7838-132-0)

Essays and articles (selected)

• What is the use of phonetics?, in: Educational Review (February 1910)
• Nature and Art in Language, in: American Speech 5 (1929), pp. 89ff ( Part 1, Part 2)
• Adversative Conjunctions, in: Linguistics (1933)