In 1918 Johnston was commissioned by the Canadian War Memorial to record the activities of the Royal Canadian Air Force personnel training for overseas duty. During this period he produced at least seventy-three works of which many are among the finest in the war collection. Following his service Johnston returned to Toronto and in the summer of 1918, joined Lawren Harris, J.E.H. MacDonald and art patron Dr. James MacCallum in their first box-car trip to Algoma. Johnston returned to Algoma in 1919 and 1920 with A.Y. Jackson, Lawren Harris and J.E.H. MacDonald.

In 1920 Johnston became a founding member of the Group of Seven along with fellow Canadian artists A.Y. Jackson, Arthur Lismer, Lawren Harris, Franklin Carmichael, Frederick H. Varley and J.E.H. MacDonald. They held their first show in May of 1920 but Johnston’s association with the group didn’t last very long. Since critics were raging against the group’s radical approach in art, Johnston feared the repercussions of his association with the Group of Seven. Wanting to paint in a less controversial style, he held a first solo show at Eaton’s in late 1920 and never exhibited with the group afterwards.

Johnston then moved to Winnipeg where he became the Principal at the Winnipeg School of Art and Director of the gallery until 1924. About 1926 he changed his name from "Frank" to "Franz" after a numerologist friend told him that the name "Frank" would never bring him success. From then on, his paintings were signed "Franz Johnston". By 1927 he was back in Toronto to take office as Principal at the Ontario College of Art, a position he held until 1929.

From 1930 to 1940, he ran a summer school of art that he established at Georgian Bay, a part of Ontario he loved to paint. During this period, he started to paint in the Far North and in 1939 he was commissioned by the Eldorado Gold Mines to paint in the Great Bear Lake area. He painted landscapes, trappers, miners and the northern aboriginal peoples. In 1940 he closed the school and settled at Wyebridge in the Georgian Bay area. During the forties he travelled regularly to northern Ontario to paint, and made his last trip into the Nipigon territory in 1946. During his last summers he painted pastoral subjects in Quebec, Baie St. Paul, villages in the Laurentians and the Ottawa Valley.

Throughout his career, he exhibited with the Ontario Society of Artist, the Royal Canadian Academy as well as at the Spring Exhibitions of the Art Association of Montreal. He held many exhibitions in private galleries and Museums. He also illustrated and decorated many books.

In 1948, Johnston moved from Wyebridge to Midland, Ontario, but suffered a stroke soon after. His paintings were still very much in demand until his death at the age of 61.

Collections:

- National Gallery of Canada (Ottawa, ON)
- McMichael Canadian Art Collection (Kleinburg, ON)
- Art Gallery of Ontario (Toronto, ON)
- Vancouver Art Gallery (Vancouver, BC)
- Art Gallery of Nova Scotia (Halifax, NS)
- Art Gallery of Greater Victoria (Victoria, BC)
- Edmonton Art Gallery (Edmonton, AB)
- Museum London (London, ON)
- Art Gallery of Hamilton (Hamilton, ON)
- Winnipeg Art Gallery (Winnipeg, MN)
- Canadian War Museum (Ottawa, ON)
- Agnes Etherington Art Centre (Kingston, ON)
- Tom Thomson Memorial Art Gallery (Owen Sound, ON)
- Confederation Centre Art Gallery (Charlottetown, PEI)
- Glenbow Museum (Calgary, AB)
- The Robert McLaughlin (Oshawa, ON)
- Library and Archives Canada (Ottawa, ON)
- Power Corporation of Canada (Montreal, QC)
- Firestone Art Collection (Ottawa, ON)

Affiliations:

- Group of Seven (1920)
- Associate of the Royal Canadian Academy
- Royal Canadian Academy
- Ontario Society of Artist