Hounsfield was born at Newark in Nottinghamshire and educated in that county before going on to the City and Guilds College, London, and the Faraday House College of Electrical Engineering in London. Having spent the years of World War II in the RAF, he worked for Electrical and Musical Industries (EMI) from 1951 and led the design effort for Britain's first large solid-state computer. Later he worked on problems of pattern recognition. Although he had no formal university education he was granted an honorary doctorate in medicine by the City University, London (1975).

Hounsfield was awarded the 1979 Nobel Prize for medicine, together with the South-African-born physicist Allan Cormack, for his pioneering work on the application of computer techniques to x-ray examination of the human body. He was knighted in 1981. Working at the Central Research Laboratories of EMI he developed the first commercially successful machines to use computer-assisted tomography, also known as computerized axial tomography (CAT). In CAT, a high-resolution x-ray picture of an imaginary slice through the body (or head) is built up from information taken from detectors rotating around the patient. These ‘scanners’ allow delineation of very small changes in tissue density. Introduced in 1973, early machines were used to overcome obstacles in the diagnosis of diseases of the brain, but the technique has now been extended to the whole body. Although Cormack worked on essentially the same problems of CAT, the two men did not collaborate, or even meet.