Johnson was born in Florida to Nancy Sale Frey, a socialite and former model, and Robert Wood Johnson IV (“Woody” Johnson), owner of the New York Jets. She was raised in the New York City borough of Manhattan along with her sisters, Daisy and Jaime. She attended the exclusive Chapin, Marymount, and Dwight Schools and later enrolled in Brown University for one semester. She was the step-daughter of newscaster Ahmad Rashad. She was also related to documentary filmmaker Jamie Johnson, who co-produced and directed the 2003 documentary, Born Rich.  As a child, Johnson was diagnosed with diabetes. She and her father were both involved with the Juvenile Diabetes Research Foundation, working to find a cure for the disease. During her teens in the mid-to-late 1990s, Johnson received heavy attention from the paparazzi media as a New York “party girl” and socialite.

At the age of 14, Johnson co-wrote a book with her father entitled Managing Your Child’s Diabetes. She appeared as herself on the television shows The Fabulous Life of… and E! True Hollywood Story. In 1999, Johnson had a minor role in the film Gloria, starring Sharon Stone. In 2002, she was featured in the documentary It Girls, which was filmed in 2000 during Manhattan’s Fashion Week.  When Nicky Hilton declined to co-star with her sister, Paris, in The Simple Life, Paris asked Johnson, who also declined the offer; the role was subsequently given to Nicole Richie. Johnson called it the “stupidest mistake of my life” because her dream was to be an actress.  Johnson also had a part in the never-aired The Tinsley Bumble Show, wherein she played a catty, vindictive socialite named Mimi von Lustig.

Johnson’s mother revealed that her daughter struggled with borderline personality disorder. Johnson’s mother attributed her daughter’s troubles to the disorder.  In 2006, Johnson had a public falling out with her aunt, Elizabeth Ross “Libet” Johnson, after Johnson accused her aunt of stealing her boyfriend, John Dee.  In 2007, Johnson adopted Ava Monroe (born August 14, 2006), an infant girl from Kazakhstan. Nicky Hilton is the child’s godmother.

Johnson was openly bisexual and dated both men and women. In October 2009, Courtenay Semel, whom Johnson had dated off and on from 2008 to 2009, reportedly set Johnson’s hair on fire after a fight. In November 2009, Johnson was arrested for allegedly stealing jewelry, shoes, six hundred pages of a legal document, clothing, and underwear from the apartment of English fashion model Jasmine Lennard, who was tipped off by Semel. Johnson pled not guilty to burglary and receiving stolen property and had a preliminary hearing scheduled for February 2, 2010.

After refusing to seek treatment for drug abuse, Johnson was cut off financially by her family, which led to the impounding of her Porsche, for which court records showed Johnson owed Porsche Financial Services a total of $105,740.93. Johnson was also sued by a nanny service who won a $20,000 judgement against her.  On December 9, 2009, Johnson announced via Ustream video that she and reality television star Tila Tequila were engaged. Four days later, Johnson stated that she would be changing her and her daughter’s last name to “Nguyen”, Tila Tequila’s legal surname, though this never occurred.

On December 29, 2009, at 1:13 a.m., Johnson left a message on Twitter saying, “Sweet dreams everyone… I’m getting a new car…” On January 4, 2010, the Daily News reported that a maid found Johnson’s dead body in the bedroom of her West Hollywood home. An unidentified 911 caller reported that Johnson was ice cold and her hands had turned blue. The caller also stated that Johnson was on medications and that they often got “all screwed up”.  On February 4, 2010, the Los Angeles Coroner’s Office announced that she had died of diabetic ketoacidosis. She was reported to have neglected to take insulin and therefore died due to lack of proper medical treatment. Johnson’s fiancée, Tila Tequila, had arranged plans to seek legal custody of Casey Johnson’s adopted daughter, Ava, who is currently under the legal custody of Johnson’s mother, Sale.