After a short postdoctoral appointment at the Carnegie Institute in Pittsburgh, Olive returned to Cambridge as a Fellow of Churchill College, becoming a Lecturer in the Department of Applied Mathematics and Theoretical Physics (DAMTP) in 1965.

His work at CERN, in part in collaboration with Lars Brink and Ed Corrigan, initially focused on the consistent formulation of dual fermion amplitudes, generalising the existing bosonic models.

He had by now begun collaboration with Peter Goddard and together they produced a series of papers on the mathematical foundations of string theory, notably on Virasoro and Kac-Moody algebras and their representations and relation to vertex operators.

One outcome of their work on algebras and lattices was the identification of the special role played by the two Lie groups SO(32) and E8 x E8, which would shortly be shown by Michael Green and John Schwarz to exhibit anomaly cancellation that led to the renaissance of string theory in 1984.

[4] This body of work from 1973 to 1983 was recognised with the award of the prestigious Dirac Medal in 1997 to Goddard and Olive "in recognition of their far-sighted and highly influential contributions to theoretical physics.

While still at CERN, Olive had begun to study the magnetic monopoles which 't Hooft and Polyakov had shown existed in non-abelian gauge theories, publishing a paper with Peter Goddard and Jean Nuyts.