Davis participated in breakthrough proof-of-concept studies and clinical trials of cholinesterase inhibitors. These trials (the first multicenter ones for cholinesterase inhibitors) established efficacy and ultimately led the first four of the five FDA-approved compounds for treating the symptoms of Alzheimer's: tacrine, rivastigmine, galantamine, donepezil and memantine

In 1978, Davis, together with Richard Mohs, conducted the first well-controlled study of a drug that was shown able to improve the storage and retrieval functions of long-term memory in humans.

In 1987, Davis participated in the first study providing strong evidence that Alzheimer’s risk is inherited.

While at Mount Sinai Hospital, Davis and his associates have been at the forefront in the delineation of the role of amyloid in Alzheimer’s disease, and were among the first to report the cloning and chromosomal location of the amyloid precursor protein, regarded as one of the most important discoveries in Alzheimer’s research in the previous 15 years.

Davis's work on schizophrenia has shown that oligodendroglia cells and myelin play roles in the disease's pathophysiology and that dopamine — long thought to be merely hyperactive in a schizophrenic brain — is actually hypoactive in different regions.

While studies have shown that individuals born in winter months are disproportionately likely to develop schizophrenia, Davis participated in a 2006 study that demonstrated that this disproportionality also exists in tropical regions, ruling out cold weather as the cause.

Davis graduated magna cum laude from Yale College and later valedictorian of Mount Sinai School of Medicine's second graduating class where he received the Harold Elster Memorial Award for highest academic achievement. Graduate medical education was completed at Stanford University.

In 1979, Davis was made Chief of Psychiatry at Bronx Veteran's Affairs Medical Center, where he became the first director of its Schizophrenia Biological Research Center. From 1987 until 2003, he was Chairman of Psychiatry at the Mount Sinai School of Medicine.

In 2003, Davis was appointed Dean of the Mount Sinai School of Medicine and held that position until 2007, when he was succeeded by Dennis S. Charney, M.D. Davis was also appointed as the President and C.E.O. of the Mount Sinai Medical Center in 2003 — positions he holds today. He is the director of the Mount Sinai Silvio Conte Neuroscience Center, Trustee of the New York Academy of Medicine, and Chair of the New York Academy of Medicine Deans Council. In addition, he has served as Chairman of the Board of Governors for the Greater New York Hospital Association.