Johanson, who was born in Chicago, gained his BA in anthropology from the University of Illinois in 1966; he received an MA from the University of Chicago in 1970 and a PhD in 1972. Two years later he was appointed professor of anthropology at Case Western Reserve University, Cleveland, and was also made associate curator of anthropology at Cleveland Museum of Natural History. He was later given the position of curator of physical anthropology and director of scientific research at the Museum. In 1981 he moved to California as director of the newly founded Institute of Human Origins at Berkeley, and later became professor of anthropology at Stanford University (1983–89).

In 1973, Johanson led his first expedition to Hadar about 100 miles northeast of Addis Ababa. Here he found a hominid knee joint. The following year he discovered further remains of a new species of fossil primate that challenged the existing theories of the evolution of modern man (Homo sapiens) and other hominids. The remains were reconstructed to form, remarkably, a 40% complete skeleton, revealing a female hominid about three and a half feet tall with a bipedal stance and a relatively small brain. The fossil proved to be some 3 million years old, making it the oldest known fossil member of the human tribe. Johanson named it Australopithecus afarensis, after the Afar triangle of NE Ethiopia where the find was made. The skeleton is popularly called Lucy, prompted by the Beatles' song ‘Lucy in the sky with diamonds’, which was playing in the camp site of Johanson's team on the evening following their momentous discovery.

During the 1975 season Johanson's team made another dramatic find. Scattered in a single hillside were more than 350 fossil pieces from a group of thirteen men, women, and children, all dating from the same time as Lucy. The ‘first family’, as it was later called, was Johanson's last major find at Hadar. Following the 1976 expedition a series of military coups, civil wars, and famines closed Ethiopia to scientific expeditions.

Johanson's analysis of the Lucy skeleton showed it to belong to an upright chimpanzee-like creature with an ape-like face, a slightly bow-legged gait, and curved toe and finger bones. According to Johanson, Lucy demonstrated that bipedalism preceded enlarged brain capacity, rather than vice versa, and marked a crucial step towards the evolution of all other antecedents of modern humans, as well as the later australopithecines identified by Raymond Dart.

The findings of Johanson's team were published in 1979, and sparked controversy among other workers in the field, notably Richard Leakey. He maintained that the genus Homo could be traced back to an age comparable with the Lucy skeleton, and was descended not from an australopithecine ancestor, such as Lucy, but from some earlier, hypothetical, hominid, perhaps some 4–5 million years old.

Although the precise relationship of A. afarensis to the early human ancestors remains in doubt, the significance of Johanson's discovery is unquestioned. His account of the discovery of Lucy was published as Lucy: The Beginnings of Humankind (with Maitland A. Edey; 1981). Johanson and Edey have also written Blueprints: Solving the Mystery of Evolution (1989).