Stahl was the son of a protestant minister from Ansbach in Germany. He studied medicine at Jena, graduating in 1684, and in 1687 was appointed physician to the duke of Sachsen-Weimar. He moved to Halle in 1694 where he became professor of medicine in the newly founded university. In 1716 he became physician to the king of Prussia.

Stahl developed phlogiston from the vague speculations of Johann Becher into a coherent theory, which dominated the chemistry of the latter part of the 18th century until replaced by that of Antoine Lavoisier. Phlogiston was the combustible element in substances. If substances contained phlogiston they would burn and the fact that charcoal could be almost totally consumed meant that it was particularly rich in phlogiston. When a metal was heated it left a calx (a powdery substance) from which it was deduced that a metal was really calx plus phlogiston. The process could be reversed by heating the calx over charcoal, when the calx would take the phlogiston driven from the charcoal and return to its metallic form. It seemed to chemists that for the first time ever they could begin to understand the normal transformations that went on around them and the theory was the first rational explanation of combustion. It is no wonder that Stahl's theory was eagerly accepted and passionately supported.

As principles in addition to phlogiston Stahl accepted water, salt, and mercury. He also adopted the law of affinity that like reacts with like. However there were difficulties with the theory for it seemed that, to explain some interactions, phlogiston must have no weight or even negative weight for the bodies that gain it, far from becoming heavier, sometimes become lighter.