He is credited with teaching the Continental Army the essentials of military drill and discipline, helping to guide it to victory. He wrote the Revolutionary War Drill Manual, the book that became the standard United States drill manual until the War of 1812.

Steuben introduced a system of progressive training, beginning with the school of the soldier, with and without arms, and going through the school of the regiment. This corrected the previous policy of simply assigning personnel to regiments. Each company commander was made responsible for the training of new men, but actual instruction was done by selected sergeants, the best obtainable.

Another program developed by Steuben was camp sanitation. He established standards of sanitation and camp layouts that would still be standard a century and a half later. There had previously been no set arrangement of tents and huts. Men relieved themselves where they wished and when an animal died, it was stripped of its meat and the rest was left to rot where it lay. Steuben laid out a plan to have rows for command, officers and enlisted men. Kitchens and latrines were on opposite sides of the camp, with latrines on the downhill side. There was the familiar arrangement of company and regimental streets.

Perhaps Steuben's biggest contribution to the American Revolution was training in the use of the bayonet. Since the Battle of Bunker Hill, Americans had been mainly dependent upon using their ammunition to win battles. Throughout the early course of the war, Americans used the bayonet mostly as a cooking skewer or tool rather than as a fighting instrument. Steuben's introduction of effective bayonet charges became crucial. In the Battle of Stony Point, American soldiers attacked with unloaded rifles and won the battle solely on Steuben's bayonet training.

In 1776, Steuben's career at Hohenzollern-Hechigen ended in scandal: he was alleged to be a homosexual and was accused of improper sexual behavior with young boys.

His young aide de camp Louis de Pontiere and his military secretary Pierre Etienne Duponceau

He never married and had no children. He left his estate to General Benjamin Walker and Captain William North, who had served as his aides-de-camp during the war, and with whom he had had an "extraordinarily intense emotional relationship ... treating them as surrogate sons".

Steuben spoke little English and he often yelled to his translator, "Here! Come swear for me!"