Oberholzer was an early practitioner of Freudian psychoanalysis and dream analysis. Beginning in June, 1913 he received personal analysis from Freud, and continued to be psychoanalyzed extensively in the Freudian manner over a period of several years. With his wife, Mira Ginzburg (1887-1949) and Swiss pastor Oskar Pfister (1873-1956), he founded the "Swiss Society for Psychoanalysis" in 1919.
Oberholzer assisted Hermann Rorschach (1884-1922) in the development of shape interpretation tests, and later trained American psychiatrists who subsequently introduced the Rorschach test in the United States.