He was best known for his short stories celebrating the world of Broadway in New York City that grew out of the Prohibition era. He spun tales of gamblers, petty thieves, actors and gangsters; few of whom go by "square" names, preferring instead to be known as "Nathan Detroit", "Big Jule", "Harry the Horse", "Good Time Charlie", "Dave the Dude", and so on. To New Yorkers of his generation, a "Damon Runyon character" evoked a distinctive social type from the Brooklyn or Midtown demi-monde; this type is also commonly referred to today as "Runyonesque", though not limited to just people. These stories were written in a very distinctive vernacular style: a mixture of formal speech and colorful slang, always in present tense, and always devoid of contractions.

Here is an example from the story "Tobias the Terrible", collected in More than Somewhat (1937):

If I have all the tears that are shed on Broadway by guys in love, I will have enough salt water to start an opposition ocean to the Atlantic and Pacific, with enough left over to run the Great Salt Lake out of business. But I wish to say I never shed any of these tears personally, because I am never in love, and furthermore, barring a bad break, I never expect to be in love, for the way I look at it love is strictly the old phedinkus, and I tell the little guy as much. He also makes use of many slang terms and phrases in his work, which add an authentic feel to the story (see example above). Some examples include: