Armstrong studied musical composition, violin and piano at the Royal Academy of Music from 1977 to 1981, where he was awarded the Charles Lucas prize and the Harvey Lohr scholarship for composition. He was also awarded the FTCL Fellowship in composition, and won the GLAA Young Jazz Musician of the Year in 1982. Upon completing his studies, Armstrong served as music and dance specialist at the Strathclyde Regional Council in 1984. 1985 Armstrong toured with Midge Ure on his Gift World Tour. Between 1994–2002 he was commissioned by the Royal Shakespeare Company to write music for The Broken Heart and The Tempest, both directed by Michael Boyd.

He sees no difference in credibility between popular and classical forms and this respect for the pop genre was cemented in 1994 with a one-off collaboration with the Bristol band Massive Attack on their album Protection after which the band formed their Melankolic Vanity record label releasing his first two solo albums.

One of the most popular tracks composed by Armstrong is "Escape" from Plunkett & Macleane. The composition was used in the pilot of the 2000 science fiction series Dark Angel, as well as having been used in various film trailers and Sports broadcasts due to the emotional buildup caused by its rising crescendo and choir.

In 2001 Armstrong received BAFTA, Golden Globe, and American Film Institute Award, as well as World Soundtrack Award and a Golden Satellite Award for Moulin Rouge!. In 2002 he wrote the meditative piece Visconti, commissioned by Barbican Centre Elektronika festival for the London Sinfonietta. In 2004 Armstrong collaborated with visual artists Dalziel + Scullion on One Minute to celebrate the opening of Perth's Horsecross Hall. In 2005 he received a Grammy Award for Best Score Soundtrack album for the film Ray, directed by Taylor Hackford. In 2008 his first classical release, Memory Takes My Hand, featuring a violin concerto for Clio Gould, was released on EMI Classics. Armstrong has had many collaborations including recording and performing the album Dolls with the Berlin laptop Artist AGF and Vladislav Delay. He has worked with a wide variety of more well-known musical artists, including U2, Madonna, Texas, Luciano Pavarotti.

Armstrong has released two solo records on Massive Attack's label Melankolic, followed by Piano Works on Sanctuary in 2004 and Film Works on Universal in 2005. In 2007 Armstrong recorded his first classical record, "Memory Takes My Hand", for EMI Classics with the BBC Symphony Orchestra. It was released in 2008 and includes a violin concerto "Immer" for Clio Gould.

Armstrong has written several classical commissions for the Royal Scottish National Orchestra, the London Sinfonietta, the Hebrides Ensemble and the Scottish Ensemble. In 2006 Armstrong collaborated with the visual artists Dalziel + Scullion for the reopening of the Kelvingrove Art Gallery in Glasgow with a joint exhibition called Once. In 2007 Armstrong's first opera was premiered as part of the Scottish Opera, titled '5:15 – Opera's made in Scotland', a 15min opera with a libretto by Ian Rankin.

Armstrong was appointed Officer of the Order of the British Empire (OBE) in the 2010 New Year Honours.

It was used in the trailer for the BBC's Euro 2012 coverage, and has often been used in the BBC's Top Gear series at the climax of the season finale "epic challenges". Armstrong lists the songs which Top Gear has used on his web site. "Escape" has been used in a number of action film trailers, including Spider-Man 2 and Daredevil.

Rosebud was released from a new co written and co produced project of Craig Armstrong and Scott Fraser – Winona. September 2009: "Without You (Deal Soul Brothers Remix)" – Format: 12" Vinyl single