Between 1870 and 1875, Stephan systematically studied nebulae, precisely recording their positions and discovering many new ones. His goal was to enable the exact measurement of stellar proper motions by creating a reference system of fixed objects.
In 1873, Stephan was the first person to attempt to measure the angular diameter of a star using interferometry, converting the 80 cm telescope at Marseille Observatory into an interferometer. He did this by obscuring the reflector with a mask containing two vertical slits. The star he chose to perform this experiment was Sirius. He did not succeed in resolving any stellar disks, but by 1874 had obtained an upper limit to stellar diameters of 0.158" (the true angular diameter of Sirius is 0.0059 arcseconds, and for comparison, the angular diameter of Alpha Centauri and Betelgeuse are 0.0145 and 0.05 arcseconds respectively).
He discovered the galaxy NGC 6027 in 1882 using the 80 cm reflector.
Among others, he discovered Stephan's Quintet, also known as "Arp 319", a group of five galaxies. Stephan made this discovery with the first telescope equipped with a reflection coated mirror.