In 1950, Townes was appointed professor at Columbia University. He served as executive director of the Columbia Radiation Laboratory from 1950 to 1952. He was Chairman of the Physics Department from 1952 to 1955.
In 1951, Townes conceived a new way to create intense, precise beams of coherent radiation, for which he invented the acronym maser (for Microwave Amplification by Stimulated Emission of Radiation). When the same principle was applied to higher frequencies, the term laser was used (the word "light" substituting for the word "microwave").
During 1953, Townes, James P. Gordon, and Herbert J. Zeiger built the first ammonia maser at Columbia University. This device used stimulated emission in a stream of energized ammonia molecules to produce amplification of microwaves at a frequency of about 24.0 gigahertz.
From 1959 to 1961, he was on leave of absence from Columbia University to serve as vice president and director of research of the Institute for Defense Analyses in Washington, D.C., a nonprofit organization, which advised the U.S. government and was operated by eleven universities.  Between 1961 and 1967, Townes served as both provost and professor of physics at the Massachusetts Institute of Technology.  Then, during 1967, he was appointed as a professor of physics at the University of California at Berkeley, where he remained for almost 50 years; his status was as professor emeritus by the time of his death during 2015.  Between 1966 and 1970, he was chairman of the NASA Science Advisory Committee for the Apollo lunar landing program.
For his creation of the maser, Townes along with Nikolay Basov and Alexander Prokhorov received the 1964 Nobel Prize in Physics.  Townes also developed the use of masers and lasers for astronomy, was part of a team that first discovered complex molecules in space, and determined the mass of the supermassive black hole at the centre of the Milky Way galaxy.
During 2002–2003, Townes served as a Karl Schwarzschild Lecturer in Germany and the Birla Lecturer and Schroedinger Lecturer in India.
Townes is one of the 20 American recipients of the Nobel Prize in Physics to sign a letter addressed to President George W. Bush in May 2008, urging him to "reverse the damage done to basic science research in the Fiscal Year 2008 Omnibus Appropriations Bill" by requesting additional emergency funding for the Department of Energy's Office of Science, the National Science Foundation, and the National Institute of Standards and Technology.