Edith's sixth and final son died on 25 January 1882, one day after his birth, on Maugham's eighth birthday. Edith died of tuberculosis six days later on 31 January at the age of 41. The early death of his mother left Maugham traumatized. He kept his mother's photograph at his bedside for the rest of his life. Two years after Edith's death Maugham's father died in France of cancer.

Maugham kept his own lodgings, took pleasure in furnishing them, filled many notebooks with literary ideas, and continued writing nightly while at the same time studying for his medical degree. In 1897, he published his first novel, Liza of Lambeth, a tale of working-class adultery and its consequences. It drew its details from Maugham's experiences as a medical student doing midwifery work in Lambeth, a South London slum. Maugham wrote near the opening of the novel: "... it is impossible always to give the exact unexpurgated words of Liza and the other personages of the story; the reader is therefore entreated with his thoughts to piece out the necessary imperfections of the dialogue."

Many portraits were painted of Somerset Maugham, including that by Graham Sutherland in the Tate Gallery, and several by Sir Gerald Kelly. Sutherland's portrait was included in the exhibit Painting the Century: 101 Portrait Masterpieces 1900–2000 at the National Portrait Gallery.

The writer's life allowed Maugham to travel and to live in places such as Spain and Capri for the next decade, but his next ten works never came close to rivalling the success of Liza. This changed in 1907 with the success of his play Lady Frederick. By the next year, he had four plays running simultaneously in London, and Punch published a cartoon of Shakespeare biting his fingernails nervously as he looked at the billboards.

Among his short stories, some of the most memorable are those dealing with the lives of Western, mostly British, colonists in the Far East. They typically express the emotional toll the colonists bear by their isolation. "Rain", "Footprints in the Jungle", and "The Outstation" are considered especially notable. "Rain", in particular, which charts the moral disintegration of a missionary attempting to convert prostitute Sadie Thompson, has kept its reputation. It has been adapted as a play and as several films. His The Magician (1908) is based on British occultist Aleister Crowley.

By 1914, Maugham was famous, with 10 plays produced and 10 novels published. Too old to enlist when the First World War broke out, he served in France as a member of the British Red Cross's so-called "Literary Ambulance Drivers", a group of some 24 well-known Writers, including the Americans John Dos Passos, E. E. Cummings, and Ernest Hemingway.

Maugham returned to England from his ambulance unit duties in order to promote Of Human Bondage. With that completed, he was eager to assist the war effort again. As he was unable to return to his ambulance unit, Syrie arranged for him to be introduced to a high-ranking intelligence officer known as "R"; he was recruited by John Wallinger. In September 1915, Maugham began work in Switzerland, as one of the network of British agents who operated against the Berlin Committee, whose members included Virendranath Chattopadhyay, an Indian revolutionary trying to resist colonial Britain's rule of India. Maugham lived in Switzerland as a Writer.

In 1916, Maugham travelled to the Pacific to research his novel The Moon and Sixpence, based on the life of Paul Gauguin. This was the first of his journeys through the late-Imperial world of the 1920s and 1930s which inspired his novels. He became known as a Writer who portrayed the last days of colonialism in India, Southeast Asia, China and the Pacific, although the books on which this reputation rests represent only a fraction of his output. On this and all subsequent journeys, he was accompanied by Haxton, whom he regarded as indispensable to his success as a Writer. Maugham was painfully shy, and Haxton the extrovert gathered human material which the author converted to fiction.

In June 1917, Maugham was asked by Sir william Wiseman, an officer of the British Secret Intelligence Service (later named MI6), to undertake a special mission in Russia. It was part of an attempt to keep the Provisional Government in power and Russia in the war by countering German pacifist propaganda. Two and a half months later, the Bolsheviks took control. Maugham subsequently said that if he had been able to get there six months earlier, he might have succeeded. Quiet and observant, Maugham had a good temperament for intelligence work; he believed he had inherited from his Lawyer father a gift for cool judgment and the ability to be undeceived by facile appearances.

Maugham used his spying experiences as the basis for Ashenden: Or the British Agent, a collection of short stories about a gentlemanly, sophisticated, aloof spy. This character is considered to have influenced Ian Fleming's later series of James Bond novels. In 1922, Maugham dedicated his book On A Chinese Screen to Syrie. This was a collection of 58 ultra-short story sketches, which he had written during his 1920 travels through China and Hong Kong, intending to expand the sketches later as a book.

Adapted for the stage from a story first published in 1924 in Hearst's International and reprinted in his collection The Casuarina Tree (1926), Maugham's play The Letter, starring Gladys Cooper, had its premiere in London in 1927. Later, he asked that Katharine Cornell play the lead in the 1927 Broadway version. The play was adapted as a film by the same name in 1929 with Jeanne Eagels taking Cornell's part, and again in 1940, for which Bette Davis received an Oscar nomination. In 1951, Cornell was a great success playing the lead in his comedy The Constant Wife.

In 1926, Maugham bought the Villa La Mauresque, on 9 acres (3.6 hectares) at Cap Ferrat on the French Riviera, and it was his home for most of the rest of his life. There he hosted one of the great literary and social salons of the 1920s and 30s. He continued to be highly productive, writing plays, short stories, novels, essays and travel books. By 1940, when the collapse of France and its occupation by the German Third Reich forced Maugham to leave the French Riviera, he was a refugee—but one of the wealthiest and most famous Writers in the English-speaking world.

Maugham began a relationship with Alan Searle, whom he had first met in 1928. A young man from the London slum area of Bermondsey, Searle had already been kept by older men. He proved a devoted if not a stimulating companion. One of Maugham's friends, describing the difference between Haxton and Searle, said simply: "Gerald was vintage, Alan was vin ordinaire."

Maugham's short fable "An Appointment in Samarra" (1933) is based on an ancient Babylonian myth: Death is both the narrator and a central character. The American Writer John O'Hara credited Maugham's tale as the inspiration for the title of his novel Appointment in Samarra.

Commercial success with high book sales, successful theatre productions and a string of film adaptations, backed by astute stock market Investments, allowed Maugham to live a very comfortable life. Small and weak as a boy, Maugham had been proud even then of his stamina, and as an adult he kept churning out the books, proud that he could. Yet, despite his triumphs, he never attracted the highest respect from the critics or his peers. Maugham attributed this to his lack of "lyrical quality", his small vocabulary, and failure to make expert use of metaphor in his work. In 1934 the American Journalist and radio personality Alexander Woollcott offered Maugham some language advice: "The female implies, and from that the male infers." Maugham responded: "I am not yet too old to learn."

Of Human Bondage is considered to have many autobiographical elements. Maugham gave Philip Carey a club foot (rather than his stammer); the vicar of Blackstable appears derived from the vicar of Whitstable; and Carey is a medic. Maugham insisted the book was more invention than fact. The close relationship between fictional and non-fictional became Maugham's trademark, despite the legal requirement to state that "the characters in [this or that publication] are entirely imaginary". He wrote in 1938: "Fact and fiction are so intermingled in my work that now, looking back on it, I can hardly distinguish one from the other."

Maugham, by then in his sixties, spent most of the Second World War in the United States, first in Los Angeles (he worked on many scripts, and was one of the first authors to make significant money from film adaptations) and later in the South. While in the US, he was asked by the British government to make patriotic speeches to induce the US to aid Britain, if not necessarily become an allied combatant. After his companion Gerald Haxton died in 1944, Maugham moved back to England. In private, Maugham espoused antisemitic conspiracy theories about Jewish refugees, noting that ‘the Gestapo is known to have had spies among refugees, and these have not seldom been Jews’. He returned in 1946 to his villa in France, where he lived, interrupted by frequent and long travels, until his death.

In 1947 Maugham instituted the Somerset Maugham Award, awarded to the best British Writer or Writers under the age of thirty-five for a work of fiction published in the past year. Notable winners include V. S. Naipaul, Kingsley Amis, Martin Amis and Thom Gunn. On his death, Maugham donated his royalties to the Royal Literary Fund.

Maugham had begun collecting theatrical paintings before the First World War; he continued to the point where his collection was second only to that of the Garrick Club. In 1948 he announced that he would bequeath this collection to the Trustees of the National Theatre. From 1951, some 14 years before his death, his paintings began their exhibition life. In 1994 they were placed on loan to the Theatre Museum in Covent Garden.

In 1962 Maugham sold a collection of paintings, some of which had already been assigned to his daughter Liza by deed. She sued her father and won a judgment of £230,000. Maugham publicly disowned her and claimed she was not his biological daughter. He adopted Searle as his son and heir, but the adoption was annulled. In his 1962 volume of memoirs, Looking Back, he attacked the late Syrie Maugham and wrote that Liza had been born before they married. The memoir cost him several friends and exposed him to much public ridicule. Liza and her husband Lord Glendevon contested the change in Maugham's will in the French courts, and it was overturned. However, in 1965 Searle inherited £50,000, the contents of the Villa La Mauresque, Maugham's manuscripts and his revenue from copyrights for 30 years. Thereafter the copyrights passed to the Royal Literary Fund.

There is no grave for Maugham. His ashes were scattered near the Maugham Library, The King's School, Canterbury. Liza Maugham, Lady Glendevon, died aged 83 in 1998, survived by her four children (a son and a daughter by her first marriage to Vincent Paravicini, and two more sons to Lord Glendevon). One of her grandchildren is Derek Paravicini, who is a musical Prodigy and autistic savant.

Two of his later novels were based on historical people: The Moon and Sixpence is about the life of Paul Gauguin; and Cakes and Ale contains what were taken as thinly veiled and unflattering characterizations of the authors Thomas Hardy (who had died two years previously) and Hugh Walpole. Maugham himself denied any intention of doing this in a long letter to Walpole: "I certainly never intended Alroy Kear to be a portrait of you. He is made up of a dozen people and the greater part of him is myself"—yet in an introduction written for the 1950 Modern Library edition of the work, he plainly states that Walpole was the inspiration for Kear (while denying that Thomas Hardy was the inspiration for the Novelist Driffield). Maugham's last major novel, The Razor's Edge (1944), was a departure for him in many ways. While much of the novel takes place in Europe, its main characters are American, not British. The protagonist is a disillusioned veteran of the First World War who abandons his wealthy friends and lifestyle, traveling to India seeking enlightenment. The story's themes of Eastern mysticism and war-weariness struck a chord with readers during the Second World War. It was adapted into a major motion picture released in 1946, then again in 1984 starring Bill Murray.