This originality was a problem for the Danish art establishment. In 1888, his painting Young Girl Sewing, which was also a portrait of his sister, was rejected by the Royal Danish Academy of Fine Arts which led to an open protest and as a result, Den Frie Udstilling (Exhibition of the Free) was formed by a group of artists in 1891, including Hammershøi himself, Johan Rohde, J.F. Willumsen, and Harald and Agnes Slott-Møller, as an exhibition platform inspired by the Salon des Refusés in Paris. The rejected painting won a prize at the 1889 Exposition Universelle in Paris and became part of Alfred Bramsen’s art collection.

Hammershøi's paintings, with their attention to detail, simplicity and muted colour scheme, enjoyed critical acclaim throughout Europe and were appreciated by great artists and literary figures of the time, among them Emil Nolde and Rainer Maria Rilke. Hammershøi became known for the tonality in his works, restricting his palette to greys, desaturated yellows, greens, violets and other dark hues. His interiors often contain figures with their backs turned to the viewer which project an air of tension and mystery, while his exteriors of grand buildings in Copenhagen and London are devoid of people, a quality that they share with his landscapes. However, some of his interiors are without a figure, almost to prove that the key to the serene atmosphere derives from the treatment of the space and does not require anything but the presence of still objects. Hammershøi's wife Ida (née Ilsted) is the model for the figures in many of his quiet interiors, and she also features in similar paintings by her brother, Peter Ilsted, Hammershøi’s close friend and colleague.