Townsend Studied under Henry Tonks at the Slade School of Art from 1926. There, his contemporaries and friends numbered William Coldstream, Anthony Devas, Nicolette Macnamara, Rodrigo Moynihan and Claude Rogers. In 1930 he was awarded the Slade Open Bursary and completed his studies there, simultaneously winning the newly inaugurated Wilson Steer Landscape Prize. He travelled widely in the early 1930s and was offered his first solo show at the Bloomsbury Gallery. From the Mid 1930s he became passionately and actively involved in anti-fascist politics, initially in support of the Basques and Republicans in Spain, then against the rise of Nazism, and the activities of the British Union of Fascists.

He contributed to the 1935 anti-fascist solidarity exhibition where fellow exhibitors included Duncan Grant, Paul Nash, Eric Gill, and Henry Moore. In 1938 he declined an invitation to stand as the Labour parliamentary candidate for Canterbury but continued to join anti-fascist rallies until the outbreak of war. He spent the war as an artillery battery office and then with the Education Corps, painting throughout.

After the war he started teaching, first casually at Camberwell, then more permanently at the Slade, joining old friends William Coldstream and Claude Rogers on the staff. It was also in the late 1940s that he became a long association with Banff School of Art in the Canadian Rockies. By the 1960s he was spending years at a time in Canada. In 1962 he was appointed visiting professor in the Department of Fine Arts, University of Alberta and served as consultant to the Canada Council and the National Gallery of Canada. Two years later he was touring the country as sole juror, selecting works for the Sixth Biennial Exhibition of Canadian Painting for the National Gallery of Canada. He was appointed Head of Painting at Banff School of Fine Arts in 1966.

Back in London he was elected a Fellow of University College London, and appointed Professor of Fine Art (personal chair), with responsibility for establishing and coordinating the post-graduate programme at the Slade School. After his death UCL established the annual William Townsend Memorial Lecture at the Slade. A memorial scholarship in his name was established at Banff.

In 1976 the Tate Gallery mounted a retrospective of his paintings and drawings.