While studying chemistry at the university in his native Vienna, Perutz became interested in x-ray diffraction techniques; after graduation he went to England to work on the x-ray diffraction of proteins with William L. Bragg at the Cavendish Laboratory, Cambridge. A meeting in Prague with the biochemist Felix Haurowitz in 1937 turned his attention to the blood protein hemoglobin and he received his PhD in 1940 for work in this field. Soon after, he was arrested as an alien and interned, first on the Isle of Man and then in Canada with Hermann Bondi and Klaus Fuchs. He was released and allowed to return to Britain in 1941. In the following year he joined the staff of Lord Mountbatten, examining various applications of science for the war effort.

After the war Perutz organized the setting up, in 1946, of the molecular biology laboratory in Cambridge, where he was soon joined by John Kendrew. After seven years' hard work Perutz was still far from his objective of working out the three-dimensional structure of hemoglobin, a molecule containing some 12,000 atoms. Then in 1953 he applied the heavy atom or isomorphous replacement technique to his work whereby heavy metal atoms, e.g., mercury or gold, are incorporated into the molecule under study. This alters the diffraction patterns, making it easier to compute the positions of atoms in the molecule. By 1959 he had shown hemoglobin to be composed of four chains, together making a tetrahedral structure, with four heme groups near the molecule's surface.

For this achievement Perutz received the 1962 Nobel Prize in chemistry, sharing it with Kendrew, who had worked out the structure of the muscle protein, myoglobin, using similar methods. In later work Perutz demonstrated that in oxygenated hemoglobin the four subunits are rearranged. This explained the change in structure noted by Haurowitz in 1938. Perutz also investigated the various mutated forms of hemoglobin characteristic of inherited blood diseases.

While indulging his hobby of mountaineering, Perutz made some notable contributions to the understanding of glaciers, particularly by his demonstration that the rate of flow is faster at the glacier surface than at the base.

Perutz continued as head of the Medical Research Council molecular biology unit at Cambridge until his retirement in 1979. He published a brief account of his early life and his views on science in his Is Science Necessary? (1989).