Johnstad grew up working on a cattle farm in Wisconsin. Among his family were two sisters and his father, who was an Air Force fighter pilot, and his mother, an English Teacher. Johnstad graduated high school at 16 and spent a year traveling. He enrolled in the California Institute of the Arts in 1986 to study film and completed the program in three years.

Johnstad would later work on scripts and in the mid 1990s, a low-budget action film True Vengeance was released in the mid-1990s. Snyder asked Johnstad to assist him with his film 300, a fictionalized graphic novel adaptation of Frank Miller's comic involving the Battle of Thermopylae. The film got him nominated for a Saturn Award along with Snyder and Michael Gordon.

In 2011, Johnstad has was working with Snyder to co-write the film The Last Photograph and 300: The Battle of Artemisia for Warner Bros.. Johnstad also worked outside of collaborations with Snyder, and was hired by producers Basil Iwanyk and Jason Netter to adapt Max Allan Collins’ novel Black Hats. His next screenplays that were produced was Act of Valor and 300: Rise of an Empire.

In 2015, Variety described Johnstad as beginning "to make a name for himself as Writer who delivers big action in his scripts, along with classic heroes audiences love to root for." His screenplay based on The Coldest City by Antony Johnston was announced that year. The film was titled Atomic Blonde and released on July 28, 2017.