Johnstone was born in Denholm in the Scottish Borders. He worked on the family farm during the First World War, selling up in 1919 to study at Edinburgh College of Art. He went on to the Royal Scottish Academy Schools, winning the Carnegie travelling scholarship in 1925. Most of his professional life was spent teaching in London; he was Principal of Camberwell School of Art from 1938 and Central School of Art from 1947 to 1960. As well as being a highly original painter, he was an influential spokesman for art education and a friend of Hugh MacDiarmid. Johnstone returned to Scotland on his retirement and spent the last two decades of his life painting large abstract works.