Among her best-known books are The Story of the Treasure Seekers (1898) and The Wouldbegoods (1899), which both recount stories about the Bastables, a middle-class family that has fallen on (relatively) hard times. The Railway Children is also known from its adaptation into a 1970 film version. Her children's writing also included numerous plays and collections of verse. She created an innovative body of work that combined realistic, contemporary children in real-world settings with magical objects – what would now be classed as contemporary fantasy – and adventures and sometimes travel to fantastic worlds. In doing so, she was a direct or indirect influence on many subsequent writers, including P. L. Travers (author of Mary Poppins), Edward Eager, Diana Wynne Jones and J. K. Rowling. C. S. Lewis wrote of her influence on his Narnia series and mentions the Bastable children in The Magician's Nephew. Michael Moorcock would go on to write a series of steampunk novels with an adult Oswald Bastable (of The Treasure Seekers) as the lead character. Most recently, Jacqueline Wilson has written a sequel to the Psammead trilogy, entitled Four Children and It.
Nesbit also wrote for adults, including eleven novels, short stories and four collections of horror stories.