Thomson was born at Bonsyde in Scotland and educated at Edinburgh University; his first academic posts were as lecturer in botany at Aberdeen University (1850–51) and Marischal College (1851–52). He was then appointed to the chairs of natural history at Cork (1853) and Belfast (1854–68). From 1870 he was professor of natural history at Edinburgh University.

Thomson is chiefly remembered for his extensive studies of deep-sea life, and particularly of marine invertebrates, in which he came to specialize. He made a number of oceanic expeditions to various parts of the world. In 1868–69 he led two deep-sea biological and depth-sounding expeditions off the north of Scotland, discovering, at a depth of some 650 fathoms, a wide variety of invertebrate forms, many of them previously unknown. To explain the variations in temperature that occurred at great depths he postulated the existence of oceanic circulation. After a further expedition to the Mediterranean (1870), Thomson published The Depths of the Sea (1872), in which he described his researches and findings. This culminated in his appointment as scientific head of the Challenger Expedition to the Atlantic, Pacific, and Antarctic oceans (1872–76), during which soundings and observations were made at 362 stations in a circumnavigation of some 70,000 miles. Using temperature variations as indicators, Thomson produced evidence to suggest the presence of a vast mountain range in the depths of the Atlantic – the Mid-Atlantic Ridge. His findings were later confirmed by a German expedition in 1925–27. Knighted on his return from the Challenger voyage, Thomson began preparation of the expedition's scientific reports – a work that eventually ran to 50 volumes – but had to resign in 1881 due to ill health. Thomson also wrote a general account of the expedition in The Voyage of the Challenger (1877).