Sham is noted for his work on density functional theory (DFT) with Walter Kohn, which resulted in the Kohn–Sham equations of DFT. The Kohn–Sham method is widely used in materials science. Kohn received a Nobel Prize in Chemistry in 1998 for the Kohn–Sham equations and other work related to DFT.
Sham's other research interests include condensed matter physics and optical control of electron spins in semiconductor nanostructures for quantum information processing.