Reddy’s early research was conducted at the AI labs at Stanford, first as a graduate student and later as an Assistant Professor, and at CMU since 1969. His AI research concentrated on perceptual and motor aspect of intelligence such as speech, language, vision and robotics. Over a span of three decades, Reddy and his colleagues created several historic demonstrations of spoken language systems, e.g. voice control of a robot, large vocabulary connected speech recognition, speaker independent speech recognition, and unrestricted vocabulary dictation. Reddy and his colleagues have also made seminal contributions to Task Oriented Computer Architectures, Analysis of Natural Scenes, Universal Access to Information,and Autonomous Robotic Systems.In Hearsay I, one of the first systems capable of continuous speech recognition and subsequent systems like Hearsay II, Dragon and Harpy, he and his students developed many of the ideas underlying modern commercial speech recognition technology. Some of these ideas — most notably the "blackboard model" for coordinating multiple knowledge sources — have been adopted across the spectrum of applied artificial intelligence.
His other major research interest has been in exploring the role of “Technology in Service of Society". An early attempt in this area was the establishment, in 1981, of “Centre Mondial Informatique et Ressource Humaines” in France by Jean-Jacques Servan-Schreiber and a technical team of Nicholas Negroponte, Alan Kay, Seymour Papert and Terry Winograd. Reddy served as the Chief Scientist for the center.
One of Reddy's current research interests is the "Universal Digital Library Project".The project includes efforts to archive 1000 newspapers for the next 1000 years and provide online access to UNESCO heritage sites.