Malamud is most renowned for his short stories, oblique allegories often set in a dreamlike urban ghetto of immigrant Jews. His prose, like his settings, is an artful pastiche of Yiddish-English locutions, punctuated by sudden lyricism. On Malamud's death, Philip Roth wrote: "A man of stern morality, a need to consider long and seriously every last demand of an overtaxed, overtaxing conscience torturously exacerbated by the pathos of human need unabated." (Malamud's friend and editor Robert Giroux later disputed that Malamud's morality was ever "stern".)

The Fixer, his best-known novel, won the National Book Award in 1966 and the Pulitzer Prize for Fiction. Malamud's novel The Natural was made into a movie starring Robert Redford (described by the film writer David Thomson as "poor baseball and worse Malamud"). Among his other novels were The Assistant, set in a Jewish grocers in New York and drawing on Malamud's own childhood, and Dubin's Lives, a powerful evocation of middle age which uses biography to re-create the narrative richness of its protaganists' lives.

His daughter, Janna Malamud Smith, relates her memories of her father in her memoir, My Father is a Book.