He was born in Kirkintilloch in 1881 and educated at Kirkintilloch Board School then at Lenzie Academy. Studying Moral Philosophy and Political Economy at the University of Glasgow, he failed to graduate, but helped launch the left-wing journal, Forward, in 1906, and in the same city later became associated with the 'Red Clydesiders', a socialist grouping that included James Maxton and Manny Shinwell. In 1909 he published a book, Our Scots Noble Families, which aimed to discredit the landed aristocracy.
First elected as a Member of Parliament (MP) for the constituency of Stirling and Clackmannan West in November 1922 general election, Johnston lost his seat at the October 1924 general election. He quickly returned to Parliament, winning the Dundee by-election in December.
He was re-elected for Stirling and Clackmannan Western at the 1929 general election, when he was appointed Under-Secretary of State for Scotland by Prime Minister Ramsay MacDonald. This troubled administration was relatively short-lived; only a handful of Labour ministers supported MacDonald's proposal of a coalition government, with Johnston and other Red Clydesiders among the strong opponents. Long a member of the Independent Labour Party, he opposed its disaffiliation from the Labour Party. He lost his seat at the 1931 general election, and failed to be returned at a by-election in Dunbartonshire in 1932, but he joined the new Scottish Socialist Party, which affiliated to Labour, and he returned (representing Stirling and Clackmannan West) to the House of Commons at the 1935 general election and remained an MP until retiring in the 1945 general election.
Johnston was the key government figure involved in the evacuation of St Kilda, Scotland in 1930. Documents relating to this event, which attracted considerable press attention, are available to view in the National Archives of Scotland.