A few months later, in the summer of 1943, Thompson and his family were moved to the Weixian Internment Camp in Shandong (modern Weifang city), where they remained until liberated by American paratroopers in 1945.
In 1959 he was accepted into the University of Washington at Seattle, where he obtained a BA in 1960, and studied for his PhD on the lost book of Shenzi under Hellmut Wilhelm.
After receiving his PhD he taught at the University of Wisconsin from 1963 to 1970, and then in 1970 he was appointed to a position at the School of Oriental and African Studies (SOAS) in London, where he remained until his retirement in 1996.
He was a key figure, together with D. C. Lau, Angus Graham and Sarah Allan, in making SOAS a world-renowned centre for the teaching of Chinese philosophy during the 1970s and 1980s.
After his death, Thompson's family presented his library to the Centre for Excavated Texts and Ancient Literature, Fudan University, Shanghai.