Primarily known as a writer of poetry, Obstfelder's debut collection of poems from 1893, Digte (Poems), is usually credited as one of the earliest examples of modernism in Norwegian literature. Despite producing only a mere handful of works during his short lifespan, he is considered one of the most important figures in Norwegian literature of the late 19th century. Strongly influenced by the French poet Charles Baudelaire, his writings have often been described as the literary equivalent of Edvard Munch's paintings; indeed, the two were friends. Obstfelder was a source of inspiration for Rainer Maria Rilke's work The Notebooks of Malte Laurids Brigge.
Obstfelder lived most of his life as a pauper, and never stayed in one place for very long. By all accounts he had an unstable mental health, and suffered several nervous breakdowns. He died from tuberculosis in Copenhagen in 1900.