His studies on motor response to faradic electrical stimulation of the cerebral cortex, internal capsule and spinal cord became classics of the field.

Between 1884 and 1886, Horsley was the first to use intraoperative electrical stimulation of the cortex for the localization of epileptic foci in humans, preceding Fedor Krause and Wilder Penfield.

He studied myxedema and cretinism, which are caused by a decreased level of the thyroid hormones (hypothyroidism), and established for the first time, in experiments with monkeys, that they could be treated with extracts of the gland.

In June 1886, he was elected a Fellow of the Royal Society[5] and, in 1891, jointly with his brother-in-law Francis Gotch, delivered their Croonian Lecture on the subject of the mammalian nervous system.

A year later, in 1894, he won the Royal Medal for "his investigations relating to the physiology of the nervous system, and of the thyroid gland, and to their applications to the treatment of disease".

[7] His best-known innovation is the Horsley–Clarke apparatus, developed in 1908 together with Robert H. Clarke, for performing the so-called stereotactic surgery, whereby a set of precise numerical coordinates are used to locate each brain structure.

However, he resigned as prospective candidate, citing opposition to his views on women's suffrage and temperance on the part of constituency officials,[9] just before the First World War started.

[11] On the outbreak of the First World War, he volunteered for active duty on the Western Front, where he was initially posted as surgeon at the British hospital at Wimereux, France.

[7] In May 1915, he was posted as a colonel and Director of Surgery of the British Army Medical Service in Egypt, based at the 21st General Hospital in Alexandria, in support of the Dardanelles Campaign.

The Walton Centre for Neurology & Neurosurgery NHS Trust in Liverpool, England, another leading Neurosurgical Hospital, dedicated its intensive care unit to him, naming it the Horsley ward.