Born at Yatala (now Rosewater) near Port Adelaide, South Australia, Thompson was the sixth child of Joseph Thompson and Jane Ann Batey, both of Northumberland, England.

Thompson married Millicent Maud Garnaut on 19 January 1909 and initially farmed near Keith in southeast South Australia before a drought in 1914 led to their return to Port Adelaide.

His influence in the union movement led to his preselection as the Labor Party candidate for the safe Labor seat of Port Adelaide at the 1930 South Australian election.

After the institution of single-member electorates in the South Australian House of Assembly in 1938, Thompson successfully transferred to Semaphore, serving there until 1946.

In 1946 Thompson resigned from state parliament to successfully run as the Labor candidate for the federal seat of Hindmarsh, based on Port Adelaide, in the House of Representatives.