Beginning in 1918, while living in Geneva, Schad created his own version of thePhotogram (which later was named "Schadographs") where a contour picture is developed on light-sensitive platters. From 1920 to 1925, he spent some years in Rome and Naples. Having married Marcella Arcangeli, the daughter of a Roman professor, he settled in Naples where he attended painting and drawing courses at the art academy. In 1927 the family emigrated to Vienna. His paintings of this period are closely associated with the New Objectivity Movement.
During his stay in Italy he developed a smooth, realistic style that recalls the clarity he admired in the paintings of Raphael. Upon returning to Berlin in 1927 he painted some of the most significant works of the New Objectivity. They are characterized by "an artistic perception so sharp that it seems to cut beneath the skin", according to Wieland Schmied, who calls Schad the "prototypical possessor of the 'cool gaze' which distinguishes this movement from earlier forms of realism".
Entartete Kunst (dekadent, forvansket kunst, "degenereret kunst") var den tyske betegnelse, nationalsocialisterne brugte om kunst, de ikke brød sig om.Ekspressionistiske og avant-gardistiske kunstnere, især hvis de var jøder, var forhadte. Nazisternes kunst skulle afspejle den tyske folkesjæl, og specielt var det ønskværdigt, at billeder kunne afspejle et særligt tilhørsforhold mellem den enkelte tysker og hans hjemstavn (Heimat).En udstilling af "Entartete Kunst" turnerede i Tyskland med værker af de kunstnere, tyskerne skulle holde sig fra.De "Entartete Kunst"nere fik forbud mod at udøve deres kunst. Mange af dem var internationalt anerkendte.
Although many sense that Schad was horrified by the Nazis, his art was not condemned in the way that the work of Otto Dix, George Grosz, Max Beckmann, and many other artists of the New Objectivity movement was; this may have been because of his lack of commercial success.He became interested in Eastern philosophy around 1930, and his artistic production declined precipitously.After the crash of the New York stock market in 1929, Schad could no longer rely on his father's financial support, and he largely stopped painting in the early 1930s In 1937, unknown to him, the Museum of Modern Art showed three Schadographs, given by Tristan Tzara, in a show about Dada and Surrealism. The same year, Nazis included Schad in Great German Art, their antidote to the Degenerate Art show.Schad lived in obscurity in Germany through the war and after it. After the destruction of his studio in 1943 Schad moved to Aschaffenburg. The city commissioned him to copy Matthias Grünewald's Virgin and Child (Stuppach, parish church), a project on which he worked until 1947.Schad continued to paint in the 1950s in Magic Realist style and returned in the 1960s to experiments with photograms. Schad's reputation did not begin to recover until the 1960s, when a couple of shows in Europe dovetailed with the rise of Photorealism.Schad died in Stuttgart on February 25, 1982.