Luther makes it clear in several places that this, not the Theses, was the pivotal event of his life. The most important of these appears in his Preface to the Complete Edition of Luther's Latin Writings of 1545. Several other mentions of the event are recorded from his "Table Talks," one from 1532 (LW 54:193-194), one from 1538 (LW 54:308-309), and one from 1542-43 (LW 54:442-443).
When we examine the above mentioned texts, and especially the 1545 Preface, the following observations beg to be made.
(1) Luther's conversion and breakthrough involved the correct understanding of God's righteousness. The phrase "[in the Gospel] the righteousness of God is revealed" (Romans 1:17) had become the focal point of his struggle with God. Luther had long struggled to blamelessly keep God's Law in order to become righteous. He knew that this is what God demanded of him and all people. Time and again he failed to keep God's Law and achieve the righteousness that God demanded.
Luther's struggle with God came to a head as he was wrestling with this Romans 1:17. He tells us that he was extremely zealous to understand Romans but that this phrase about God's righteousness stood in the way. This phrase, which to us is so clearly good news, was for Luther bad news.
Why? Because the phrase "the righteousness of God" like most Biblical terms (e.g., grace, faith, justification, etc.) had been reinterpreted by scholastic theologians of the high and late Middle Ages 1100-1500 A.D. (esp. Gabriel Biel, Duns Scotus, Peter Lombard, Thomas Aquinus) to support a theology of Law and works. For centuries the Church had taught that the righteousness of God was God's active, personal righteousness or justice by which he punishes the unrighteous sinner.
This, Luther informs us, is what he had learned. Therefore whenever he came across the phrase "the righteousness of God" in Scripture, it terrified him ("struck my conscience like lightning," "was like a thunderbolt in my heart") because he knew that he was an unrighteous sinner who fell far short of God's righteous (perfect) demands.
Even worse, Rom. 1:17, filled Luther with anger and hatred toward God. "I did not love, yes, I hated the righteous God who punishes sinners." Is it not enough, Luther tells us he murmured, that God crushes us miserable sinners with His law, that He has to threaten us with punishment through the Gospel, too?
After meditating day and night, finally the breakthrough came when Luther gave heed to the words at the end of 1:17, "He who through faith is righteous shall live." Then he realized that the verse was not talking about the active righteousness that God demands, but the passive righteousness that He freely gives to those who believe the Gospel. The sinner is justified (declared righteous) by God through faith in the work and death of Jesus, not by our work or keeping of the Law. Put another way, the sinner is justified by receiving (faith) rather than achieving (works). Later Luther would say that we are saved by the alien righteousness of Christ, not by a righteousness of our own doing.
(2) The tower experience, according to Luther was a conversion experience. When he had discovered that God gives His righteousness as a gift in Christ, he felt that he "was altogether born again and had entered paradise itself through open gates . . . that place in Paul was for me truly the gate to paradise." Now his conscience was at rest, now he was certain of his salvation. Before there had been only unrest and uncertainty.
How did Luther now feel about the word "righteousness of God"? "I extolled my sweetest word with a love as great as the hatred with which I had before hated the word `righteousness of God.' Thus that place in Paul was for me truly the gate to paradise." Thus fortified and converted by the Gospel, Luther was now a ready instrument to be used by God for reformation!