"[10] In 1987, Shay shifted from neuropathology to the study of posttraumatic stress disorder (PTSD) and published a short article linking the combat histories of patients at the VA with the experience of war described in Homer's Iliad.

[11] He was then approached by classics professor Gregory Nagy who suggested that the topic might be expanded into a full-length book on the nature and treatment of PTSD.

He has written two books, Achilles in Vietnam: Combat Trauma and the Undoing of Character (1994)[12] and Odysseus in America: Combat Trauma and the Trials of Homecoming (2002),[13] which discuss PTSD by reference to the experiences of American veterans of the Vietnam War, and the experiences depicted in the Iliad and the Odyssey.

Shay's research uncovered what may be the earliest historical reference to PTSD, in Lady Percy's soliloquy in Henry IV, Part 1 (act 2, scene 3, lines 40-62).

"[13] Shay is a passionate advocate of improved mental health treatment for soldiers and of more vigorous efforts to prevent PTSD,[10] in addition to structural reform of the ways the U.S. armed forces are organized, trained, and counseled.

Moral injury is a distinct syndrome from (but often co-morbid with) PTSD and is one of the primary themes for the veterans described in his books, often leading to personality changes and obstructing successful treatment.

[22][23] Shay is respected in military circles, having conducted the Commandant of the Marine Corps Trust Study (1999–2000); serving as visiting scholar-at-large at the U.S.