In 1977, he participated in the first biological expedition to survey the recently discovered hydrothermal vents at the Galapagos Rift, and contributed to the understanding of these unique ecosystems which are fueled by chemical energy from the Earth's interior rather than by sunlight.

In his position at Rutgers, Grassle served as founding director that university's then new (1987) Institute of Marine and Coastal Sciences (IMCS), where his work focused on near-shore continental shelf communities and the continued development of ocean observing systems, including an early cabled marine observing system deployed in 15 meters of water, the LEO-15 Long-term Ecosystem Observatory, that could be remotely monitored from Rutgers.

[6][7] He also conceived the first effort to integrate marine biological data on a global scale over the internet, the Ocean Biogeographic Information System (OBIS), which was adopted as the database for the Census, and continues to the present under the auspices of the Intergovernmental Oceanographic Commission.

[10] Following a period of poor health, Grassle died in his sleep at the Regency Jewish Heritage Nursing Center in Franklin Township, New Jersey, on July 6, 2018, aged 78.

On news of his death, Rich Lutz, a Rutgers Distinguished Professor and Grassle's successor as Director of IMCS, wrote: "... in the span of two short decades, [Fred] put together one of the finest marine science programs in the world.