He is renowned as a scholar and translator of Friedrich Nietzsche. He also wrote a 1965 book on Georg Wilhelm Friedrich Hegel and published a translation of Goethe's Faust.
Kaufmann was raised a Lutheran. At age 11, finding that he believed neither in the Trinity nor in the divinity of Jesus, he converted to Judaism. Kaufmann subsequently discovered that his grandparents were all Jewish. Kaufmann left Germany and emigrated to America in 1939 and began studying at Williams College, where he majored in philosophy and took many religion classes. Although he had the opportunity to move immediately into his graduate studies in philosophy, and despite advice not to do so by his professors, he ultimately joined the war effort against the Nazis by serving in U.S. intelligence. During World War II, he fought on the European front for 15 months. After the war, he completed a PhD in the philosophy of religion at Harvard in a mere two years. His dissertation was titled "Nietzsche's Theory of Values" and eventually became a chapter in his Nietzsche: Philosopher, Psychologist, Antichrist (1950).
He spent his entire career thereafter, from 1947 to 1980, teaching philosophy at Princeton University, where his students included the Nietzsche scholars Frithjof Bergmann, Richard Schacht, Alexander Nehamas, and Ivan Soll. Kaufmann became a naturalized citizen of the United States of America in 1960.
In a 1959 article in Harper's Magazine, he summarily rejected all religious values and practice, especially the liberal Protestantism of continental Europe that began with Schleiermacher and culminated in the writings of Paul Tillich and Rudolf Bultmann. In their place, he praised moralists such as the biblical prophets, the Buddha, and Socrates. He argued that critical analysis and the acquisition of knowledge were liberating and empowering forces. He forcefully criticized the fashionable liberal Protestantism of the 20th century as filled with contradictions and evasions, preferring the austerity of the book of Job and the Jewish existentialism of Martin Buber. Kaufmann discussed many of these issues in his 1958 Critique of Religion and Philosophy.
Kaufmann wrote a good deal on the existentialism of Søren Kierkegaard and Karl Jaspers. Kaufmann had great admiration for Kierkegaard's passion and his insights on freedom, anxiety, and individualism. Kaufmann wrote: "Nobody before Kierkegaard had seen so clearly that the freedom to make a fateful decision that may change our character and future breeds anxiety." Although Kaufmann did not share Kierkegaard's religious outlook and was critical of his Protestant theology, Kaufmann was nevertheless sympathetic and impressed with the depth of Kierkegaard's thinking:
"...I know of no other great writer in the whole nineteenth century, perhaps even in the whole of world literature, to whom I respond with less happiness and with a more profound sense that I am on trial and found wanting, unless it were Søren Kierkegaard."
Kaufmann edited the anthology Existentialism from Dostoevsky to Sartre. Kaufmann disliked Martin Heidegger's thinking, along with his unclear writing.
Kaufmann is renowned for his translations and exegesis of Nietzsche, whom he saw as gravely misunderstood by English speakers, as a major early existentialist, and as an unwitting precursor, in some respects, to Anglo-American analytic philosophy. Michael Tanner called Kaufmann's commentaries on Nietzsche "obtrusive, self-referential, and lacking insight", but Llewellyn Jones wrote that Kaufmann's "fresh insights into ... Nietzsche ... can deepen the insights of every discriminating student of literature," and The New Yorker wrote that Kaufmann "has produced what may be the definitive study of Nietzsche's ... thought—an informed, scholarly, and lustrous work."
Kaufmann wrote that superficially
"...it also seems that as a philosopher [Nietzsche] represents a very sharp decline [from Kant and Hegel] ... because [Nietzsche] has no 'system.' Yet this argument is hardly cogent. ... Not only can one defend Nietzsche on this score ... but one must add that he had strong philosophic reasons for not having a system."
Kaufmann also sympathized with Nietzsche's acerbic criticisms of Christianity. However, Kaufmann faulted much in Nietzsche, writing that "my disagreements with [Nietzsche] are legion." Regarding style, Kaufmann argued that Nietzsche's Thus Spoke Zarathustra, for example, is in parts badly written, melodramatic, or verbose, yet concluded that the book "is not only a mine of ideas, but also a major work of literature and a personal triumph."
Kaufmann described his own ethic and his own philosophy of living in his books, including The Faith of a Heretic: What Can I Believe? How Should I Live? What Do I Hope? (1961) and Without Guilt and Justice: From Decidophobia to Autonomy (1973). He advocated living in accordance with what he proposed as the four cardinal virtues: ambition/humility, love, courage, and honesty.