After servicing as Headmaster in Government High Schools, Bhandarkar was appointed Assistance Professor of Sanskrit at the Elphinstone College, Bombay (1868-81) . He was the first Indian to be appointed Professor of Sanskrit in the Deccan College, Poona(1882).After his retirement as Professor in 1893, he was appointed Vice-Chancellor of the University of Bombay (1893-95).He was a Member of the Viceroy’s Legislative Council in 1903,an represented the University in the Bombay Legislative Council during 1904-08.Made a C.I.E. in 1889 , Bhandarkar was Knighted at the Delhi Darbar (K.C.I.E.) in 1911.

Bhandarkar’s writings are characterised thoroughness and precision, and show his versatility and wide range of interest. He was a pioneer in applying Western method to the study of Sanskrit and Indian antiquities, and his works present the happiest combination of the Orient and the Occident. Bhandarkar’s article on Haug’s translation of the ‘Aitareya Brahmana' attracted the attention of Weber, who republished it in the ‘Indische Studien’ .

His two elementary ‘Books of Sanskrit’ have help generation of student all over India. Bhandarkar’s ‘ Wilson Philological Lecturers ‘ (1877) and ‘Early History of the Deccan ’ (1884) are still regarded as authoritative. His ‘ Reports on the Search of Sanskrit Manuscripts’ constitute significant contribution to the history of Sanskrit and Jain literature and philosophy ‘

Vaisnavism, Saivism and Minor Religious Systems’, his last major publication, is a masterly exposition of the subject.

Bhandarkar sent a paper to the International Congress of Orientalists at London in 1876,and attended the Vienna Session in 1886 .Literary honours came to him after his works were known to the world of scholers. He was elected Honorary Member of the Asiatic (or Oriental) Societies of Britain, Germany, France, Italy, America and Russia. The Hon. Ph. D. degree was conferred on him by the Gottingen and Calcutta Universities, and LL.D. by the University of Bombay.

Besides being a teacher, researcher and author, Bhandarkar was a social reformer and an active member of the Prarthana Samaj, In fact he was known in India more as a social and religious reformer than as a scholar. As a propagandist of souci reform, Bhandarkar used his great equipment as a Sanskritist and a historian to show that many of the orthodox customs of his day had no foundation in ancient Hindu religion.

Bhandarkar believed “ it to be an act of Divine Providence that the English a loan of all the candidates (i.e. the Marathas, the Potuguese, the Dutch and the French),, who appeared about the same time for the empire of India, should have succeeded.” He wanted India to remain within the British Empire, and in his view, “If they (i.e. the British) retire we should immediately return to the old state of things.” According to him we lack corporate consciousness and should eschew false race -pride.

The Bhandarkar Oriental Research Institute was formly inaugurated on 6th July 1917 on the completion of the 80th year of Bhandarkar and he presided over the First Oriental Conference held at Poona in1919. He passed away peacefully on Rishipanchami day, 24 August 1925. Bhandarkar had three sons, Shridhar, Prabhakar and Devadatta (D.R.Bhandarkar), of whom the youngest Devadatta survived him. Shridhar was Professor of Sanskrit, and Prabhakar was medical practitioner. Devadatta, after serving in the Archaeological Survey, retired as Carmichael Professor at the University of Calcutta.