Doherty was educated at Queensland and later at Edinburgh, where he gained his PhD in 1970. After serving at the Wistar Institute in Philadelphia, he was appointed in 1982 professor of experimental pathology at the Curtin Institute, Canberra. In 1988 Doherty moved to St Jude's Children's Research Hospital, Memphis, as chairman of the Immunology Department.

In 1974 Doherty, in collaboration with Rolf Zinkernagel, began to consider the response of the mouse immune system to viral meningitis. It was commonly held at this time that the presence of bacterial or viral invaders were alone sufficient in themselves to initiate an immune response. Consequently, as expected, the infected cells were attacked by the mouse's own T lymphocytes. Yet, to their surprise, when T cells from one mouse strain were deployed against infected cells from another strain, the lymphocytes failed to respond. Clearly an additional factor was required to trigger the immune response.

They were aware, following the work of George Snell and others, that major histocompatibility (MHC) antigens played a significant role in controlling the immune response to transplants. They consequently began to examine the role of MHC proteins in the immune response. Working with mice from various strains, they found that T cells from one strain could be provoked to attack infected cells only if the invaders shared at least one MHC antigen.

For his work in this field Doherty shared the 1996 Nobel Prize for physiology or medicine with Rolf Zinkernagel.