At age 27 he was appointed a Captain in Washington's army, and was afterwards treasurer of New Jersey, and bought at public auction from the state of New Jersey land which had been confiscated from a Tory landowner. The land, described as "William Bayard's farm at Hoebuck" comprised approximately what is now the city of Hoboken. Stevens built his estate at Castle Point, on land that would later become the site of Stevens Institute of Technology (bequeathed by his son Edwin Augustus Stevens).

In 1802 he built a screw-driven steamboat, and in 1806 he built the Phoenix, a steamboat that ultimately sailed from Hoboken to Philadelphia in 1809, thereby becoming the first steamship to successfully navigate the open ocean. On October 11, 1811, Stevens' ship the Juliana, began operation as the first steam-powered ferry (service was between New York, New York, and Hoboken, New Jersey). The first railroad charter in the U.S. was given to Stevens and others in 1815 for the New Jersey Railroad. He designed and built a steam locomotive capable of hauling several passenger cars at his estate in Hoboken, New Jersey in 1825.The invention of the steam engine helped begin the modern railroads and trains. He helped develop United States patent law.