How did the Catholic church respond to Luthers teachings?

Answer 1

The pope excommunicated him forthwith (1). In a culture that the Church had created in that 'there was 'no salvation outside the Church' this was tantamount to comdemning him to hell. However, the Church's belief that there was 'no salvation outside the Church' is erroneous as scripture requires only that Faith in Jesus Christ is needed (2).

That said, the Church did then undergo its own internal Reformation, and revisited many of the concerns that Luther had raised, and, credit where credit is due, did clean up its act but not before the Reformation had taken hold right across Europe and beyond.

NOTES (Added here by a different author than the one who composed the above response):

(1) In the Catholic Church, excommunication serves a couple purposes. First, it informs those who sin gravely, typically in certain public matters, that they are separated from God's grace and so risk the loss of heaven if they are not reconciled with God before they die. The advantage to the fallen could be invaluable. Second, excommunication informs those who may be unaware that certain people, people whom they previously trusted to provide reliable examples and teachings about what is necessary for salvation, are no longer dependable. The advantage to the faithful can be significant.

(2) The Catholic Church teaches that baptism is necessary for salvation. It can be achieved, however, by three means. First, recalling Israel's delivery through water from slavery, the typical means to be saved from slavery to sin is through baptism by water where the Father, Son and Holy Spirit are invoked, and the intention to become part of God's family is desired. Second, a person may be baptized by "desire", meaning that they have lived with all their heart the truths about God that they found or were exposed to during their lifetimes. Third, that a person chooses death rather than renounce what they know to be true about God. The latter is called baptism by blood. With regard to there being "no salvation outside the Church", it is not simply a matter of "membership" in the Catholic Church. For more authoritative information on these and other questions, the Catholic Church publishes the "Catechism of the Catholic Church", a comprehensive summary of what the Church teaches and why.

.Catholic AnswerThe Catholic Church responded to Luther's heresy broadly with the Catholic reform, known as the "counter-reformation" by protestants and secular scholars. With Martin Luther, specifically, it condemned all of his teachings at the Council of Trent, which was an Ecumenical Council of the entire Church which has served from the very beginning (first century) to be the way the Church has resolved these kind of issues.

from

A Catholic Dictionary, edited by Donald Attwater, Second edition, revised 1957

The Counter-Reformation is the name given to the Catholic movement of reform and activity which lasted for about one hundred years from the beginning of the Council of Trent (q.v., 1545), and was the belated answer to the threatening confusion and increasing attacks of the previous years. It was the work principally of the Popes St. Pius V and Gregory XIII and the Council itself in the sphere of authority, of SS. Philip Neri and Charles Borromeo in the reform of the clergy and of life, of St. Ignatius and the Jesuits in apostolic activity of St. Francis Xavier in foreign missions, and of St. Teresa in the purely contemplative life which lies behind them all. But these were not the only names nor was it a movement of a few only; the whole Church emerged from the 15th century purified and revivified. On the other hand, it was a reformation rather than a restoration; the unity of western Christendom was destroyed; the Church militant (those still on earth) led by the Company of Jesus adopted offence as the best means of defence and, though she gained as much as she lost in some sense, the Church did not recover the exercise of her former spiritual supremacy in actuality.

from

Modern Catholic Dictionary by John A. Hardon, S.J. Doubleday & Co., Inc. Garden City, NY 1980

A period of Catholic revival from 1522 to about 1648, better know as the Catholic Reform. It was an effort to stem the tide of Protestantism by genuine reform within the Catholic Church. There were political movements pressured by civil rules, and ecclesiastical movements carried out by churchmen in an attempt to restore genuine Catholic life by establishing new religious orders such as the Society of Jesus and restoring old orders to their original observances, such as the Carmelites under St. Teresa of Avila (1515-98). The main factors responsible for the Counter Reformation, however, were the papacy and the council of Trent (1545-63). Among church leaders St. Charles Borromeo (1538-84), Archbishop of Milan, enforced the reforms decreed by the council, and St. Francis de Sales of Geneva (1567-1622) spent his best energies in restoring genuine Catholic doctrine and piety. Among civil rulers sponsoring the needed reform were Philip II of Spain (1527-98) and Mary Tudor (1516-58), his wife, in England. Unfortunately this aspect of the reformation led to embitterment between England and Scotland, England and Spain, Poland and Sweden, and to almost two centuries of religious wars. As a result of the Counter Reformation, the Catholic Church became stronger in her institutional structure, more dedicated to the work of evangelization, and more influential in world affairs.