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Johnstone thrust himself into the limelight just five weeks later when his header secured a 1–0 victory over Celtic in the 1970 Scottish League Cup Final. Johnstone was still 16 at the time, but the faith shown in his ability by manager Willie Waddell paid off handsomely, as Rangers claimed their first major trophy for just over four years.

Since then, he has worked extensively in the football media, including for BBC Scotland, Scottish Television, Radio Clyde and Real Radio Scotland, where he co-presented the station's football phone-in until the end of the 2011-12 season. He also co-commentates on Rangers matches for the club's TV channel.

Johnstone had a short spell as player-manager of Partick Thistle during the 1986–87 season, before leaving professional football in 1987.

He was tempted back to Ibrox by Jock Wallace in January 1985 for £25,000. He returned to a Rangers side that was in the midst of a doleful period in their history, and it was hoped that the return of a former favourite could galvanise an ailing team. However, it failed to work out and Johnstone was handed a free transfer when Graeme Souness took over the reins at Ibrox in the summer of 1986. His return to Rangers was not a success, with 23 appearances and one goal.

Having been placed on the transfer list by Greig in April 1983, Johnstone left Rangers after the 1983 Scottish Cup Final defeat against Aberdeen to join Chelsea for a £30,000 transfer fee. Signed in September 1983, Johnstone provided extra cover in the Chelsea squad which won the Second Division title in 1984. He failed to dislodge the established forward duo of Kerry Dixon and David Speedie. He failed to hold down a regular place, making just four appearances, and had a month on loan to Dundee United during the 1983–84 season.

That season was to be the high point for the John Greig era, and Rangers' fortunes dipped badly thereafter. They did win the Scottish Cup in 1981 and the Scottish League Cup in 1982, but found themselves playing second fiddle in the Premier Division to Celtic and the emerging New Firm of Aberdeen and Dundee United.

With Arsenal and Tottenham Hotspur reportedly interested in luring Rangers' top marksman to London, Johnstone submitted a transfer request in the summer of 1978. He was seeking a new challenge in his career, but the intervention of new Rangers manager John Greig persuaded Johnstone to stay in Glasgow. He was named club captain, and in his first season with the armband, he almost led the Ibrox side to an unprecedented second successive treble; only a last-gasp 4–2 defeat against Celtic at Parkhead denied Rangers the Championship, but Johnstone did get his hands on the Scottish Cup – he scored twice in the Final's second replay against Hibernian – and the League Cup, beating Aberdeen.

Johnstone made his debut in a British Home Championship match against Wales. Despite Johnstone's rich vein of scoring form in 1978, he was overlooked by Ally MacLeod during Scotland's ill-fated World Cup campaign in Argentina. Although he was a member of the squad, he did not start any of the three matches that the Scots played.

Although 1976–77 was a barren season for Rangers, they came back strongly in 1977–78 by winning their second treble inside three years. Johnstone was the outstanding performer in what was an exceptional Rangers side, scoring thirty-eight goals over the course of the campaign and picking up the Scottish Football Writers' Player of the Year accolade.

Johnstone eventually picked up a league championship medal at the end of the 1974–75 campaign, as Rangers ended Celtic's nine-year reign as champions of Scotland, and he was an integral part of The Gers' domestic treble success a year later. He scored a total of 31 goals in 51 appearances, including two in a 3–1 win over Hearts in the 1976 Scottish Cup Final. He scored his first, a typical header, after just 42 seconds and thus earned himself a unique place in the annals of Scottish football: the referee had actually kicked off the match early, so Johnstone had actually hit the net before the allotted 3pm kick-off time had been reached.

Johnstone soon became a regular in the starting line-up, and he picked up a Scottish Cup winners' medal in 1973 when Rangers defeated Celtic 3–2 at Hampden Park. Johnstone played a huge role in the winning goal, rising above the Celtic defence to head a Tommy McLean free-kick towards goal, and when his header struck both posts, Tam Forsyth was on hand to nudge the rebound over the line. The McLean-Johnstone combination that created this famous goal was a hallmark of Rangers' play in the 1970s.

Despite his heroics against Celtic, Johnstone found regular first-team outings in the number '9' jersey hard to come by, largely due to the presence of Colin Stein, Scotland's first £100,000 player, although he did score 11 goals in 16 league appearances during the 1971–72 season. He compensated for his lack of frontline action by often playing as a centre-back when either Ronnie McKinnon or Colin Jackson was injured, and when the duo were ruled out of the 1972 European Cup Winners' Cup Final, Johnstone (still only 18) deputised in the match against Dynamo Moscow.

Johnstone signed for Rangers as a schoolboy in 1968. He turned professional in 1970 and made his debut on 19 September 1970, aged 16 years and 319 days. Johnstone scored two goals in that match, a 5–0 victory against Cowdenbeath.

Derek Joseph Johnstone (born 4 November 1953) is a Scottish former football player and manager.