After writing The Man Who Fell in Love with the Moon, Spanbauer moved to Portland, Oregon. There he started Dangerous Writers, a private writer's workshop that has gained notoriety for its insistence that its participants probe taboo topics that get at a writer's core sense of self.

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As Emily Chenoweth notes, in these workshops Spanbauer encourages his students "to find 'the sore place' in themselves and use it for their fiction." His methods have proven popular among a number of Northwest writers, many of whom have gone on to be quite successful. Perhaps the most famous among them is Chuck Palahniuk.

In the decade following the success of The Man Who Fell in Love with the Moon, Spanbauer worked on his third novel, In the City of Shy Hunters, which he published in 2001.

Although it has not yet achieved the same cult status as his second novel, In the City of Shy Hunters is in some ways a more personal work. Tracing the experience of Will Parker, a young man raised on an Indian reservation who moves to New York City in search of his blood brother and first lover, Charlie Two Moons, the novel is set in the early years of the AIDS epidemic. It reflects many of Spanbauer's earlier interests, but pursues them in a contemporary setting and offers a gritty portrait of the dispossessed in the midst of a mystifying pandemic.

As the time it took Spanbauer to write the novel suggests, this story was in many ways a difficult one to tell. In interviews, the author acknowledges that writing it almost killed him.

In 1996, Spanbauer was diagnosed with AIDS when he went to a doctor for what he thought was the flu. Since then he has struggled to make sense of the disease and its effects on his life.

As he explains, "Why I almost died is because I took a good long look at this virus and the death and anguish it caused. I lived with it every day for years, then came down with it myself. I went to a place so dark it is unspeakable."

And yet as unspeakable as this pain was, Spanbauer used the writing of In the City of Shy Hunters to make sense of his loss. Moreover, he credits writing the novel for perhaps being "the thing that saved my ass," for "the desire to tell the true story as clearly as I knew how kept me going."

Spanbauer continues to write. In 2006, he published a new novel, Now Is the Hour. In this work, he returns to Idaho in the 1960s and describes the life of Rigby John Kluesner, a gay seventeen-year-old, as he hitchhikes to San Francisco. Fleeing his Roman Catholic upbringing and the mores of Pocatello, the young man embarks on a journey to self-discovery.

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