Jerome Bruner describes Nelson as a "contextual functionalist": she seeks "the contexts that give human acts their meaning" while investigating the functions that these acts play in longer-term scenarios. She has also studied childhood amnesia and the development of episodic memory.
Nelson's book Narratives from the Crib (Harvard University Press, 2006) investigates the cognitive and linguistic development of a two-year-old, based on an in-depth analysis of the child's crib talk.
Her book Language in Cognitive Development: Emergence of the Mediated Mind (Cambridge University Press, 1998) stands in contrast to the theories of Jean Piaget and others that cognitive and linguistic development are independent of each other, and instead views language acquisition as a bridge that connects a child's social and cultural growth with his or her growing knowledge of the world.
She is also the author or co-author of:
- Structure and Strategy in Learning to Talk (University of Chicago Press, 1973)
- Young Children's Knowledge of Relational Terms: Some ifs, ors, and buts (with Lucia A. French, Springer-Verlag, 1985)
- Making Sense: The Acquisition of Shared Meaning (Academic Press, 1985)
- Event Knowledge: Structure and Function in Development (with Janice Gruendel, Psychology Press, 1986)
- Sociocultural Psychology: Theory and Practice of Doing and Knowing (with Ethel Tobach, Cambridge University Press, 1995)
- Conceptual Development: Piaget's Legacy (with Ellin Kofsky Scholnick, Susan A. Gelman, and Patricia H. Miller, Psychology Press, 1999)
- Young Minds in Social Worlds: Experience, Meaning, and Memory (Harvard University Press, 2007)
Awards and honors 
In 1999, Nelson was one of four recipients of the Society for Research in Child Development award for Distinguished Scientific Contributions to Child Development. In 2001, a symposium in her honor was held as part of the Biennial Meeting of the Society for Research in Child Development, and in 2002 the Journal of Cognition and Development published a special issue in her honor.
- Ph.D. Program in Psychology: Emeritus Faculty, CUNY, retrieved 2011-04-19.
- Bruner, Jerome (2004), "Katherine Nelson: Contextual Functionalist", in Lucariello, Joan M., The development of the mediated mind: sociocultural context and cognitive development, Psychology Press, pp. 239–244, ISBN 978-0-8058-4473-3.
- Goleman, Daniel (April 6, 1993), "Studying the Secrets Of Childhood Memory", New York Times.
- Spencer, Janine (October 16, 1998), "When society is to blame", Times Higher Education.
- SRCD Awards History: Distinguished Scientific Contributions to Child Development, retrieved 2011-04-19.
- "Faculty activities", 365 Fifth: Newsletter of the Graduate Center (City University of New York), Summer 2001.
- Zelazo, Philip David, ed. (2002), A Special Issue in Honor of Katherine Nelson: A Special Issue of Journal of Cognition and Development, Psychology Press, ISBN 978-0-8058-9678-7.