During the following decade Vallotton painted, wrote art criticism and made a number of prints. In 1891 he executed his first woodcut, a portrait of Paul Verlaine. The many woodcuts he produced during the 1890s were widely disseminated in periodicals and books in Europe as well as in the United States, and were recognized as radically innovative in printmaking. They established Vallotton as a leader in the revival of true woodcut as an artistic medium; in the western world, the relief print, in the form of commercial wood engraving, had long been utilized mainly as a means to accurately reproduce drawn or painted images and, latterly, photographs.

Vallotton's starkly reductive woodcut style features large masses of undifferentiated black and areas of unmodulated white. While emphasizing outline and flat patterns, Vallotton generally made no use of the gradations and modeling traditionally produced by hatching. The influences of post-Impressionism, Symbolism and the Japanese woodcut are apparent; a large exhibition of ukiyo-e prints had been presented at the École des Beaux-Arts in 1890, and Vallotton, like many artists of his era an enthusiast of Japonism, collected these prints. He depicted street crowds and demonstrations — including several scenes of police attacking anarchists — bathing women, portrait heads, and other subjects which he treated with a sardonic humor. His graphic art reached its highest development in Intimités (Intimacies), a series of ten interiors published in 1898 by the Revue Blanche, which deal with tension between men and women. Vallotton's prints have been suggested as a significant influence on the graphic art of Edvard Munch, Aubrey Beardsley, and Ernst Ludwig Kirchner.

By 1892 he was affiliated with Les Nabis, a group of young artists that included Pierre Bonnard, Ker-Xavier Roussel, Maurice Denis, and Edouard Vuillard, with whom Vallotton was to form a lifelong friendship. During the 1890s, when Vallotton was closely allied with the avant garde, his paintings reflected the style of his woodcuts, with flat areas of color, hard edges, and simplification of detail. His subjects included genre scenes, portraits and nudes. Examples of his Nabi style are the deliberately awkward Bathers on a Summer Evening (1892 – 93), now in the Kunsthaus Zürich, and the symbolist Moonlight (1895), in the Musée d'Orsay.

Around 1899 his printmaking activity diminished as he concentrated on painting, developing a sober, often bitter realism independently of the artistic mainstream. His Portrait of Gertrude Stein (1907) was painted as an apparent response to Picasso's portrait of the previous year, and in The Autobiography of Alice B. Toklas Stein described the very methodical way in which Vallotton painted it, working from top to bottom as if lowering a curtain across the canvas.

Vallotton's paintings of the post-Nabi period found admirers, and were generally respected for their truthfulness and their technical qualities, but the severity of his style was frequently criticized. Typical is the reaction of the critic in the March 23, 1910 issue of Neue Zürcher Zeitung who complained that Vallotton "paints like a policeman, like someone whose job it is to catch forms and colors. Everything creaks with an intolerable dryness ... the colors lack all joyfulness." In its uncompromising character his art prefigured the New Objectivity that flourished in Germany during the 1920s, and has a further parallel in the work of Edward Hopper.

He continued to publish occasional art criticism, in addition to other writings. He wrote eight plays, some of which received performances (in 1904 and 1907), although their reviews appear to have been unfavorable. He also wrote three novels, including the semi autobiographical La Vie meurtrière (The Murderous Life), begun in 1907 and published posthumously.

Vallotton responded in 1914 to the coming of the First World War by volunteering for the French army, but he was rejected because of his age. In 1915 – 16 he returned to the medium of woodcut for the first time since 1901 to express his feelings for his adopted country in the series, This is War, his last prints. He subsequently spent three weeks on a tour of the Champagne front in 1917, on a commission from the Ministry of Fine Arts. The sketches he produced became the basis for a group of paintings, The Church of Souain in Silhouette among them, in which he recorded with cool detachment the ruined landscape. In his last years Félix Vallotton concentrated especially on still lifes and on "composite landscapes", landscapes composed in the studio from memory and imagination. Always a prolific artist, by the end of his life he had completed over 1700 paintings and about 200 prints, in addition to hundreds of drawings and several sculptures. He died on the day after his 60th birthday, following cancer surgery in Paris in 1925.

His brother Paul was an art dealer; he founded the Galerie Paul Vallotton in Lausanne in 1922, which continued operation for many years under the control of his descendants.