From 1970 to 1974, Hawking and his associates provided mathematical proof for the hypothesis formulated by American physicist John Wheeler known as the "No Hair Theorem." This theorem states that the only properties that particles of matter keep once they enter a black hole are mass, angular momentum (or spin), and electric charge. Matter entering a black hole loses its shape, its chemical composition, and its distinction as matter or antimatter.

Since 1974 Hawking has studied the behavior of matter in the immediate vicinity of a black hole from a theoretical basis in quantum mechanics. Quantum mechanics is a theory that describes how subatomic particles behave and how matter and radiation interact. He found, to his initial surprise, that black holes—from which nothing was supposed to be able to escape—could emit thermal radiation, or heat. Several explanations for this phenomenon were proposed, including one involving the creation of virtual particles. A virtual particle differs from a real particle in that a virtual particle cannot be seen by means of a particle detector, but it can be observed through its indirect effects. Empty space is full of virtual particles fleetingly "created" out of nothing, forming a particle and antiparticle pair that immediately destroy each other. (This concept is a violation of the principle of conservation of mass and energy, which says that the combined amount of mass and energy in a system must stay the same. The concept is permitted—and predicted—by the uncertainty principle of German physicist Werner Heisenberg, which states that it is impossible to measure both the position and energy of a particle precisely. Hawking proposed that when a particle pair is created near a black hole, one half of the pair might disappear into the black hole, leaving the other half to radiate away from the black hole. To a distant observer, the radiation of the leftover particle would appear as thermal radiation.

Throughout the 1990s Hawking sought to produce a theory that could connect several theories used by scientists to explain the universe. This theory would combine quantum mechanics and relativity to form a quantum theory of gravity (see Unified Field Theory). Such a unified physical theory would incorporate all four basic types of interactions between matter and energy: strong nuclear interactions, weak nuclear interactions, electromagnetic interactions, and gravitational interactions.

The properties of space-time, the beginning of the universe, and a unified theory of physics are all fundamental research areas of science. Hawking has made, and continues to make, major contributions to the modern understanding of all these areas. He has also made his work accessible to the public through several books, including A Brief History of Time (1988) and Black Holes and Baby Universes and Other Essays (1993), which are suitable for a general audience. In 1992 American filmmaker Errol Morris helped make A Brief History of Time into a film about Hawking’s life and work.