In 1895 he returned to Marburg as an associate professor, and two years later succeeded Eduard Schwartz (1858–1940) as chair of classical philology at the University of Giessen. From 1903 till his death in 1908, he was a full professor at the University of Heidelberg. He was working on his magnum opis, the Geschichte des Untergangs der antiken Religion, a detailed critical study of classical religion, but was unable to complete it.
In 1903, he co-founded the study group Eranos with a fellow Marburg student, Gustav Adolf Deissmann. The two, along with Wissowa and Wilhelm Schulze, were part of a daily Tischrunde 'von glücklischter Zusammensetzung', an informal learned society of Classics scholars.[3]
Dieterich was notable for identifying the origin & use of manuum vellatio. He notes that the ritual was originally Persian, brought to the West by Alexander the Great, interwoven into the worship of Isis and then seeped into the Roman sphere of influence. Dieterich cites the works of Constantine VII Porphyrogenitus, which noted the ritual being used from Diocletian's time till the Byzantine period.[4]
Much of Dieterich's work involved research of traditional beliefs, mythology and religion of the Greco-Roman world. He was the author of an influential work titled "Abraxas: Studien zur Religionsgeschichte des spätern Altertums", a study based on a magical papyri that was housed at the Lateran Museum.[6] In 1903 he published "Eine Mithrasliturgie", in which he proposed that lines 475 – 834 of the Paris Magical Papyrus contained the official liturgy of the Mithras Cult. His theory was met with skepticism and criticized by several scholars in regards to the Mithraic origin of the liturgy.[7] He participated in a long standing debate with Franz Cumont over his Mithraic interpretation of the papyrus.[8] Other significant works by Dieterich include:
De hymnis Orphicis capitula quinque (Marburg, 1891).
Nekyia: Beiträge zur Erklärung der neuentdeckten Petrusapokalypse, (1893) – Nekyia; contributions to the explanation of the newly revealed Apocalypse of Peter.
Die Grabschrift des Aberkios, (1896) – The grave inscriptions of Aberkios.
Mutter Erde, (1905) – Mother Earth.
Kleine Schriften, (1911). Richard Wünsch (ed). – Smaller works.
Pulcinella: pompejanische Wandbilder und römische Satyrspiele (Leipzig, 1897). Comic characters from classical antiquity to contemporary times.