Westphal's contributions to medical science are many; in 1871 he coined the term agoraphobia when he observed that three male patients of his displayed extreme anxiety and feelings of dread when they had to enter certain public areas of the city.
He also demonstrated a relationship between tabes dorsalis (nerve degeneration in the spinal cord) and paralysis in the mentally insane.
Westphal is credited with describing a deep tendon reflex anomaly in tabes dorsalis that later became known as the "Erb–Westphal symptom" (named with neurologist Wilhelm Heinrich Erb (1840–1921).
His son, Alexander Karl Otto Westphal (1863–1941) was also a psychiatrist, and is associated with the Westphal–Piltz syndrome (neurotonic pupillary reaction).
Westphal, in addition to his multiple contributions to neurology and neuroanatomy, has been credited with introducing rational and non-censorious treatment to psychiatric hospitalization in Germany.