He was born 20 January 1915, and studied with Charles Reilly and Patrick Abercrombie at the University of Liverpool. He worked enthusiastically with Donald Gibson on the replanning and reconstruction of Coventry until 1941, when war service with the Royal Engineers interrupted this part of his career. It did, however, lead to a post as governmental advisor on planning and reconstruction to the government of Burma.

Returning to post-war Britain, Percy Johnson-Marshall was employed at the Ministry of Town and Country Planning, where he was involved in framing the 1947 Town and Country Planning Act. He then moved to the London County Council as Senior Planner, responsible for London's Comprehensive Development Areas which included the showpiece Lansbury Estate, conceived as model housing for the Festival of Britain. Johnson-Marshall was also active in national and international architectural and planning organisations, ranging from RIBA and RTPI, to the MARS group and the International Centre for Regional Planning and Development, of which he was a founder member.

In 1959 Johnson-Marshall was appointed first as Senior Lecturer in the Department of Architecture in the University of Edinburgh, and then as Professor of Urban Design and Regional Planning. In 1964 he set up Percy Johnson-Marshall and Associates, which produced everything from regional plans to detailed schemes for town centres across the world. In the 1960s, he was increasingly active in international planning, serving as a judge of many international competitions and as a member of the advisory committee for the redevelopment of Les Halles in Paris. He was vice-president of the International Society of City and Regional Planners (ISOCARP), the UN consultant on human settlements, and chairman of the Congress on Planning for Metropolitan Cities, held in Mexico City in 1968.

After his death in 1993, Percy Johnson-Marshall's huge collection was stored at various locations in Edinburgh. The material is now being brought together in Edinburgh University Library, alongside the architectural collections of W. H. Playfair, Sir Rowand Anderson, Sir Robert Lorimer, Patrick Geddes and Sir Robert Mathew. It includes books on city design, and planning, bound planning reports, bulletins, pamphlets, and conference reports, long runs of planning and architectural journals, archival photographs and colour slides, plans, maps and storyboards, covering the major projects on which he was engaged.