In 1900 he became a demonstrator in chemistry at McGill University in Montreal, Quebec, Canada, where he worked with Ernest Rutherford on radioactivity. He and Rutherford realized that the anomalous behaviour of radioactive elements was because they decayed into other elements. This decay also produced alpha, beta, and gamma radiation. When radioactivity was first discovered, no one was sure what the cause was. It needed careful work by Soddy and Rutherford to prove that atomic transmutation was in fact occurring.
His work and essays popularising the new understanding of radioactivity was the main inspiration for H. G. Wells's The World Set Free (1914), which features atomic bombs dropped from biplanes in a war set many years in the future. Wells's novel is also known as The Last War and imagines a peaceful world emerging from the chaos. In Wealth, Virtual Wealth and Debt Soddy praises Wells’s The World Set Free. He also says that radioactive processes probably power the stars.
In 1903, with Sir William Ramsay at University College London, Soddy verified that the decay of radium produced alpha particles composed of positively charged nuclei of helium. In the experiment a sample of radium was enclosed in a thin walled glass envelope sited within an evacuated glass bulb. Alpha particles could pass through the thin glass wall but were contained within the surrounding glass envelope. After leaving the experiment running for a long period of time a spectral analysis of the contents of the former evacuated space revealed the presence of helium. This element had recently been discovered in the solar spectrum by Bunsen and Kirchoff.
From 1904 to 1914, he was a lecturer at the University of Glasgow and while there he showed that uranium decays to radium. It was here also that he showed that a radioactive element may have more than one atomic mass though the chemical properties are identical. He named this concept isotope meaning 'same place' - the word 'isotope' was initially suggested to him by Margaret Todd. Soddy later showed that non-radioactive elements also could have multiple isotopes. In addition he showed that an atom moves lower in atomic number by two places on alpha emission, higher by one place on beta emission. This was a fundamental step toward understanding the relationships among families of radioactive elements.
Soddy published The Interpretation of Radium (1909) and Atomic Transmutation (1953).
In 1919 he moved to Oxford University as Dr Lee's Professor of Chemistry, where, in the period up till 1936, he reorganized the laboratories and the syllabus in chemistry.
He received the 1921 Nobel Prize in chemistry for his research in radioactive decay and particularly for his formulation of the theory of isotopes.
Soddy was also interested in Technocracy and the social credit movement, which is evidenced by his publication Wealth, Virtual Wealth and Debt (George Allen & Unwin 1926), which is used as a footnote reference in the Technocracy Study Course. Soddy himself, in a newsreel interview taken in his office and laboratory, presented in the early 30's a very nice admission and commendation for the development of Technocratic ideas in the United States.In Wealth, Virtual Wealth and Debt, Soddy turned his attention to the role of energy in economic systems. He criticized the focus on monetary flows in economics, arguing that “real” wealth was derived from the use of energy to transform materials into physical goods and services. Soddy’s economic writings were largely ignored in his time, but would later be applied to the development of biophysical economics and ecological economics and also bioeconomics in the late 20th century.
He rediscovered the Descartes' theorem in 1936 and published it as poem. The kissing circles in this problem are sometimes known as Soddy circles.