Johnstone received his degree from the engineering school at the University of California, Berkeley in 1982. Before pursuing racing professionally, he had been a promising musician — the principal trumpet of the International Youth Orchestra, touring Europe and performing alongside Herbert von Karajan and the Berlin Philharmonic, as well as with pianist Van Cliburn. He chose engineering and racing over attending the Juilliard School of Music.
He began amateur racing in high school and worked as a systems programmer in Silicon Valley to fund the hobby. After college, he worked as an instructor at the Bob Bondurant School of High Performance Driving. Honda hired him to drive during the 1984 season, and he subsequently won numerous events in IMSA competition.
Johnstone built an exceptional record in the International Motor Sports Association series. He won the SCCA National Road Racing Championship for Honda in the GT-4 class in 1986, and took IMSA championships in International Sedan for Acura in both 1987 and 1988. He finished second in the IMSA International Sedan Championship in both 1989 and 1990.
His most sustained dominance came in the IMSA Camel Lights class, which he won three consecutive times from 1991 to 1993. During this run he set all-time qualifying and race-win records and achieved notable victories including two wins at the 24 Hours of Daytona, the 12 Hours of Sebring, and the 1000km Suzuka in Japan. By the time he left professional sportscar racing, Johnstone held the all-time IMSA race win record with 54 victories.
A road course specialist, Johnstone moved to CART with Comptech Racing in 1994 and 1995, competing in a selection of events. His oval debut at the 1995 Michigan 500 produced a remarkable result: he qualified on pole with a new track record, giving Honda its first ever Champ Car pole position. He led the race comfortably until sidelined by a mechanical failure. He also set a closed-course world speed record in excess of 238 mph that year.
In 1996, Johnstone ran a full CART season with Comptech. He moved to Team Green Racing for 1997. His best CART result was a second-place finish at the Long Beach Grand Prix in 1996, and he led several IndyCar races during his time in the series without converting those positions into victories.
After retiring from professional racing following a 21-year career, Johnstone became the color analyst commentator for ABC and ESPN's coverage of IndyCar and CART. When ABC's IndyCar coverage ended, he moved into pit lane analysis for ESPN's NHRA drag racing coverage. He spent three years covering NHRA before leaving broadcasting to run a Honda dealership in Wilsonville, Oregon, where several of his historically significant race cars are on display.
Johnstone holds an instrument and commercial pilot's certificate with certified flight instructor rating and has competed in aerobatic competitions. He has appeared in over 50 television commercials and performed as a stuntman in the action film Speed. He has competed in triathlons and cycling races, earned the rank of Eagle Scout, and served on the board of directors for the Children's Cancer Association.