Callahan started out as a highly experimental artist, utilizing sub-standard instruments and recording equipment. His reason for using the lo-fi approach was not so much an aesthetic choice, rather it came form his fear of recording studios, and giving up control to professional engineers.
His later work saw him overcoming his fear of studios and producers, and in this period he recorded several albums with the influential producer Jim O'Rourke and musicians from the circles around Drag City, as well as collaborating with the similar-minded Will Oldham.
His songs are based on simple, repetitive themes, characterized by his low-pitched vocal. His lyrics are often centered around themes of extreme alienation and emotional pessimism, with the use of subtlety and dark irony.
Though still more or less left out in obscurity, Callahan is widely seen as one of the important figures of american indie rock in the 90'ies.