Stephenson's main area of research was bacterial metabolism. With Margaret Whetham and Juda Quastel, she developed the washed suspension technique, which had originated with Louis Pasteur, for extracting enzymes from bacteria. With Leonard Stickland, she was the first to isolate a bacterial enzyme from the cell in 1928, when they obtained lactic dehydrogenase from "Escherichia coli". In the 1930s, she continued to work with Stickland and demonstrated that a particular enzyme, formate hydrogenlyase, was present in cell extracts only when the bacteria had been grown in the presence of formate. This was one of the first examples of 'adaptive enzymes.' (This is now understood as the rapid transcriptional activation of the gene encoding the formate hydrogenlyase when the inducer molecule, formate, is added to the culture). Later in the 1930s Stephenson worked with Ernest Gale on enzyme adaptation and amino acid metabolism, and with Arthur Trim on metabolic studies of nucleic acids.