In 1898 Schoenberg converted to Christianity in the Lutheran church. According to MacDonald (2008, 93) this was partly to strengthen his attachment to Western European cultural traditions, and partly as a means of self-defence "in a time of resurgent anti-Semitism". In 1933, after long meditation, he returned to Judaism, because he realised that "his racial and religious heritage was inescapable", and to take up an unmistakable position on the side opposing Nazism. He would self-identify as a member of the Jewish religion later in life (Marquis Who's Who n.d.).

Beginning with songs and string quartets written around the turn of the century, Schoenberg's concerns as a Composer positioned him uniquely among his peers, in that his procedures exhibited characteristics of both Brahms and Wagner, who for most contemporary listeners, were considered polar opposites, representing mutually exclusive directions in the legacy of German music. Schoenberg's Six Songs, Op. 3 (1899–1903), for Example, exhibit a conservative clarity of tonal organization typical of Brahms and Mahler, reflecting an interest in balanced phrases and an undisturbed hierarchy of key relationships. However, the songs also explore unusually bold incidental chromaticism, and seem to aspire to a Wagnerian "representational" approach to motivic identity. The synthesis of these approaches reaches an apex in his Verklärte Nacht, Op. 4 (1899), a programmatic work for string sextet that develops several distinctive "leitmotif"-like themes, each one eclipsing and subordinating the last. The only motivic elements that persist throughout the work are those that are perpetually dissolved, varied, and re-combined, in a technique, identified primarily in Brahms's music, that Schoenberg called "developing variation". Schoenberg's procedures in the work are organized in two ways simultaneously; at once suggesting a Wagnerian narrative of motivic ideas, as well as a Brahmsian approach to motivic development and tonal cohesion.

In October 1901, he married Mathilde Zemlinsky, the sister of the Conductor and Composer Alexander von Zemlinsky, with whom Schoenberg had been studying since about 1894. He and Mathilde had two children, Gertrud (1902–1947) and Georg (1906–1974). Gertrud would marry Schoenberg's pupil Felix Greissle in 1921 (Neighbour 2001). During the summer of 1908, his wife Mathilde left him for several months for a young Austrian Painter, Richard Gerstl. This period marked a distinct change in Schoenberg's work. It was during the absence of his wife that he composed "You lean against a silver-willow" (German: Du lehnest wider eine Silberweide), the thirteenth song in the cycle Das Buch der Hängenden Gärten, Op. 15, based on the collection of the same name by the German mystical poet Stefan George. This was the first composition without any reference at all to a key (Stuckenschmidt 1977, 96). Also in this year, he completed one of his most revolutionary compositions, the String Quartet No. 2, whose first two movements, though chromatic in color, use traditional key signatures, yet whose final two movements, also settings of George, daringly weaken the links with traditional tonality. Both movements end on tonic chords, and the work is not fully non-tonal. Breaking with previous string-quartet practice, it incorporates a Soprano vocal line.

After some early difficulties, Schoenberg began to win public acceptance with works such as the tone poem Pelleas und Melisande at a Berlin performance in 1907. At the Vienna première of the Gurre-Lieder in 1913, he received an ovation that lasted a quarter of an hour and culminated with Schoenberg's being presented with a laurel crown (Rosen 1996, 4; Stuckenschmidt 1977, 184).

Schoenberg experienced triskaidekaphobia (the fear of the number 13), which possibly began in 1908 with the composition of the thirteenth song of the song cycle Das Buch der Hängenden Gärten Op. 15 (Stuckenschmidt 1977, 96). According to friend Katia Mann, he feared he would die during a year that was a multiple of 13 (quoted in Lebrecht 1985, 294).

Strauss turned to a more conservative idiom in his own work after 1909, and at that point dismissed Schoenberg. Mahler adopted him as a protégé and continued to support him, even after Schoenberg's style reached a point Mahler could no longer understand. Mahler worried about who would look after him after his death. Schoenberg, who had initially despised and mocked Mahler's music, was converted by the "thunderbolt" of Mahler's Third Symphony, which he considered a work of genius. Afterward he "spoke of Mahler as a saint" (Stuckenschmidt 1977, 103; Schoenberg 1975, 136).

In 1910 he met Edward Clark, an English music Journalist then working in Germany. Clark became his sole English student, and in his later capacity as a Producer for the BBC he was responsible for introducing many of Schoenberg's works, and Schoenberg himself, to Britain (as well as Webern, Berg and others).

Another of his most important works from this atonal or pantonal period is the highly influential Pierrot Lunaire, Op. 21, of 1912, a novel cycle of expressionist songs set to a German translation of poems by the Belgian-French poet Albert Giraud. Utilizing the technique of Sprechstimme, or melodramatically spoken recitation, the work pairs a female vocalist with a small ensemble of five Musicians. The ensemble, which is now commonly referred to as the Pierrot ensemble, consists of flute (doubling on piccolo), clarinet (doubling on bass clarinet), violin (doubling on viola), violoncello, speaker, and piano.

Nonetheless, much of his work was not well received. His Chamber Symphony No. 1 premièred unremarkably in 1907. However, when it was played again in the Skandalkonzert on 31 March 1913, (which also included works by Berg, Webern and Zemlinsky), "one could hear the shrill sound of door keys among the violent clapping, and in the second gallery the first fight of the evening began." Later in the concert, during a performance of the Altenberg Lieder by Berg, fighting broke out after Schoenberg interrupted the performance to threaten removal by the police of any troublemakers (Stuckenschmidt 1977, 185).

In what Alex Ross calls an "act of war psychosis", Schoenberg drew comparisons between Germany's assault on France and his assault on decadent bourgeois artistic values. In August 1914, while denouncing the music of Bizet, Stravinsky and Ravel, he wrote: "Now comes the reckoning! Now we will throw these mediocre kitschmongers into slavery, and teach them to venerate the German spirit and to worship the German God" (Ross 2007, 60).

The deteriorating relation between contemporary composers and the public led him to found the Society for Private Musical Performances (Verein für musikalische Privataufführungen in German) in Vienna in 1918. He sought to provide a forum in which modern musical compositions could be carefully prepared and rehearsed, and properly performed under conditions protected from the dictates of fashion and pressures of commerce. From its inception through 1921, when it ended because of economic reasons, the Society presented 353 performances to paid members, sometimes at the rate of one per week. During the first year and a half, Schoenberg did not let any of his own works be performed (Rosen 1975, 65). Instead, audiences at the Society's concerts heard difficult contemporary compositions by Scriabin, Debussy, Mahler, Webern, Berg, Reger, and other leading figures of early 20th-century music (Rosen 1996, 66).

In the 1920s, Ernst Krenek criticized a certain unnamed brand of contemporary music (presumably Schoenberg and his disciples) as "the self-gratification of an individual who sits in his studio and invents rules according to which he then writes down his notes." Schoenberg took offense at this masturbatory metaphor and answered that Krenek "wishes for only whores as listeners" (Ross 2007, 156).

His first wife died in October 1923, and in August of the next year Schoenberg married Gertrud Kolisch (1898–1967), sister of his pupil, the Violinist Rudolf Kolisch (Neighbour 2001; Silverman 2010, 223). She wrote the libretto for Schoenberg's one-act opera Von heute auf morgen under the pseudonym Max Blonda. At her request Schoenberg's (ultimately unfinished) piece, Die Jakobsleiter was prepared for performance by Schoenberg's student Winfried Zillig. After her husband's death in 1951 she founded Belmont Music Publishers devoted to the publication of his works (Shoaf 1992, 64). Arnold used the notes G and E♭ (German: Es, i.e., "S") for "Gertrud Schoenberg", in the Suite, for septet, Op. 29 (1925) (MacDonald 2008, 216) (see musical cryptogram).

Following the death in 1924 of Composer Ferruccio Busoni, who had served as Director of a Master Class in Composition at the Prussian Academy of Arts in Berlin, Schoenberg was appointed to this post the next year, but because of health problems was unable to take up his post until 1926. Among his notable students during this period were the composers Roberto Gerhard, Nikos Skalkottas, and Josef Rufer.

Along with his twelve-tone works, 1930 marks Schoenberg's return to tonality, with numbers 4 and 6 of the Six Pieces for Male Chorus Op.35, the other pieces being dodecaphonic (Auner 1999, 85).

Schoenberg continued in his post until the Nazis came to power under Adolf Hitler in 1933. While vacationing in France, he was warned that returning to Germany would be dangerous. Schoenberg formally reclaimed membership in the Jewish religion at a Paris synagogue, then traveled with his family to the United States (Friedrich 1986, 31). However, this happened only after his attempts to move to Britain came to nothing. He enlisted the aid of his former student and great champion Edward Clark, a senior Producer with the BBC, in helping him gain a British teaching post or even a British publisher, but to no avail.

During this final period, he composed several notable works, including the difficult Violin Concerto, Op. 36 (1934/36), the Kol Nidre, Op. 39, for chorus and orchestra (1938), the Ode to Napoleon Buonaparte, Op. 41 (1942), the haunting Piano Concerto, Op. 42 (1942), and his memorial to the victims of the Holocaust, A Survivor from Warsaw, Op. 46 (1947). He was unable to complete his opera Moses und Aron (1932/33), which was one of the first works of its genre written completely using dodecaphonic composition. Along with twelve-tone music, Schoenberg also returned to tonality with works during his last period, like the Suite for Strings in G major (1935), the Chamber Symphony No. 2 in E♭ minor, Op. 38 (begun in 1906, completed in 1939), the Variations on a Recitative in D minor, Op. 40 (1941). During this period his notable students included John Cage and Lou Harrison.

Schoenberg's serial technique of composition with twelve notes became one of the most central and polemical issues among American and European Musicians during the mid- to late-twentieth century. Beginning in the 1940s and continuing to the present day, composers such as Pierre Boulez, Karlheinz Stockhausen, Luigi Nono and Milton Babbitt have extended Schoenberg's legacy in increasingly radical directions. The major cities of the United States (e.g., Los Angeles, New York, and Boston) have had historically significant performances of Schoenberg's music, with advocates such as Babbitt in New York and the Franco-American conductor-pianist Jacques-Louis Monod. Schoenberg's students have been influential teachers at major American universities: Leonard Stein at USC, UCLA and CalArts; Richard Hoffmann at Oberlin; Patricia Carpenter at Columbia; and Leon Kirchner and Earl Kim at Harvard. Musicians associated with Schoenberg have had a profound influence upon contemporary music performance practice in the US (e.g., Louis Krasner, Eugene Lehner and Rudolf Kolisch at the New England Conservatory of Music; Eduard Steuermann and Felix Galimir at the Juilliard School). In Europe, the work of Hans Keller, Luigi Rognoni (it), and René Leibowitz has had a measurable influence in spreading Schoenberg's musical legacy outside of Germany and Austria. His pupil and assistant Max Deutsch, who later became a professor of music, was also a Conductor (Lewis n.d.) who made a recording of three "master works" Schoenberg with the Orchestre de la Suisse Romande, released posthumously in late 2013. This recording includes short lectures by Deutsch on each of the pieces (Anon. 2013).

Later, Schoenberg was to develop the most influential version of the dodecaphonic (also known as twelve-tone) method of composition, which in French and English was given the alternative name serialism by René Leibowitz and Humphrey Searle in 1947. This technique was taken up by many of his students, who constituted the so-called Second Viennese School. They included Anton Webern, Alban Berg and Hanns Eisler, all of whom were profoundly influenced by Schoenberg. He published a number of books, ranging from his famous Harmonielehre (Theory of Harmony) to Fundamentals of Musical Composition (Schoenberg 1967), many of which are still in print and used by Musicians and developing composers.

But in 1950, on his seventy-sixth birthday, an Astrologer wrote Schoenberg a note warning him that the year was a critical one: 7 + 6 = 13 (Nuria Schoenberg-Nono, quoted in Lebrecht 1985, 295). This stunned and depressed the Composer, for up to that point he had only been wary of multiples of 13 and never considered adding the digits of his age. He died on Friday, 13 July 1951, shortly before midnight. Schoenberg had stayed in bed all day, sick, anxious and depressed. His wife Gertrud reported in a telegram to her sister-in-law Ottilie the next day that Arnold died at 11:45 pm, 15 minutes before midnight (Stuckenschmidt 1977, 520). In a letter to Ottilie dated 4 August 1951, Gertrud explained, "About a quarter to twelve I looked at the clock and said to myself: another quarter of an hour and then the worst is over. Then the Doctor called me. Arnold's throat rattled twice, his heart gave a powerful beat and that was the end" (Stuckenschmidt 1977, 521).

Schoenberg criticized Igor Stravinsky's new neoclassical trend in the poem "Der neue Klassizismus" (in which he derogates Neoclassicism, and obliquely refers to Stravinsky as "Der kleine Modernsky"), which he used as text for the third of his Drei Satiren, Op. 28 (Schonberg 1970, 503).

Schoenberg's ashes were later interred at the Zentralfriedhof in Vienna on 6 June 1974 (McCoy 1999, 15).

World War I brought a crisis in his development. Military Service disrupted his life when at the age of 42 he was in the army. He was never able to work uninterrupted or over a period of time, and as a result he left many unfinished works and undeveloped "beginnings". On one occasion, a superior officer demanded to know if he was "this notorious Schoenberg, then"; Schoenberg replied: "Beg to report, sir, yes. Nobody wanted to be, someone had to be, so I let it be me" (Schoenberg 1975, 104) (according to Norman Lebrecht (2001), this is a reference to Schoenberg's apparent "destiny" as the "Emancipator of Dissonance").

Schoenberg was a Painter of considerable ability, whose works were considered good enough to exhibit alongside those of Franz Marc and Wassily Kandinsky (Stuckenschmidt 1977, 142) as fellow members of the expressionist Blue Rider group.

Schoenberg's superstitious nature may have triggered his death. The Composer had triskaidekaphobia (the fear of the number 13), and according to friend Katia Mann, he feared he would die during a year that was a multiple of 13 (quoted in Lebrecht 1985, 294). He dreaded his sixty-fifth birthday in 1939 so much that a friend asked the Composer and Astrologer Dane Rudhyar to prepare Schoenberg's horoscope. Rudhyar did this and told Schoenberg that the year was dangerous, but not fatal.

Ten features of Schoenberg's mature twelve-tone practice are characteristic, interdependent, and interactive (Haimo 1990, 41):

Arnold Schoenberg was born into a lower middle-class Jewish family in the Leopoldstadt district (in earlier times a Jewish ghetto) of Vienna, at "Obere Donaustraße 5". His father Samuel, a native of Bratislava, was a shopkeeper, and his mother Pauline was native of Prague. Arnold was largely self-taught. He took only counterpoint lessons with the Composer Alexander Zemlinsky, who was to become his first brother-in-law (Beaumont 2000, 87).

He was interested in Hopalong Cassidy films, which Paul Buhle and David Wagner (2002, v–vii) attribute to the films' left-wing screenwriters—a rather odd claim in light of Schoenberg's statement that he was a "bourgeois" turned monarchist (Stuckenschmidt 1977, 551–52).

Ben Earle (2003) found that Schoenberg, while revered by experts and taught to “generations of students” on degree courses, remained unloved by the public. Despite more than forty years of advocacy and the production of "books devoted to the explanation of this difficult repertory to non-specialist audiences", it would seem that in particular, "British attempts to popularize music of this kind… can now safely be said to have failed." (Earle 2003, 643).

Allen Shawn has noted that, given Schoenberg's living circumstances, his work is usually defended rather than listened to, and that it is difficult to experience it apart from the ideology that surrounds it (Taruskin 2004, 7). Richard Taruskin asserts that Schoenberg committed what he terms a "poietic fallacy", the conviction that what matters most (or all that matters) in a work of art is the making of it, the maker's input, and that the listener's pleasure must not be the composer's primary objective (Taruskin 2004, 10). Taruskin also criticizes the ideas of measuring Schoenberg's value as a Composer in terms of his influence on other artists, the overrating of technical innovation, and the restriction of criticism to matters of structure and craft while derogating other approaches as vulgarian (Taruskin 2004, 12).

His first teaching position in the United States was at the Malkin Conservatory in Boston. He moved to Los Angeles, where he taught at the University of Southern California and the University of California, Los Angeles, both of which later named a music building on their respective campuses Schoenberg Hall (UCLA Department of Music & [2008]; University of Southern California Thornton School of Music & [2008]). He was appointed visiting professor at UCLA in 1935 on the recommendation of Otto Klemperer, music Director and Conductor of the Los Angeles Philharmonic Orchestra; and the next year was promoted to professor at a salary of $5,100 per year, which enabled him in either May 1936 or 1937 to buy a Spanish Revival house at 116 North Rockingham in Brentwood Park, near the UCLA campus, for $18,000. This address was directly across the street from Shirley Temple's house, and there he befriended fellow Composer (and tennis partner) George Gershwin. The Schoenbergs were able to employ domestic help and began holding Sunday afternoon gatherings that were known for excellent coffee and Viennese pastries. Frequent guests included Otto Klemperer (who studied composition privately with Schoenberg beginning in April 1936), Edgard Varèse, Joseph Achron, Louis Gruenberg, Ernst Toch, and, on occasion, well-known actors such as Harpo Marx and Peter Lorre (Crawford 2009, 116; Feisst 2011, 6; Laskin 2008; MacDonald 2008, 79; Schoenberg 1975, 514; Starr 1997, 383; Watkins 2010, 114). Composers Leonard Rosenman and George Tremblay studied with Schoenberg at this time.

In his 2018 biography of Schoenberg’s near contemporary and similarly pioneering Composer, Debussy, Stephen Walsh takes issue with the idea with the idea that it is not possible "for a creative Artist to be both radical and popular." Walsh concludes, "Schoenberg may be the first 'great' Composer in modern history whose music has not entered the repertoire almost a century and a half after his birth" (Walsh 2018, 321–22).