As the plot unfolds, Galt is acknowledged to be a creator and inventor who symbolizes the power of the individual capitalist. He serves as an idealistic counterpoint to the social and economic structure depicted in the novel. The depiction portrays a society based on oppressive bureaucratic functionaries and a culture that embraces the stifling mediocrity and egalitarianism of socialistic idealism. In this popular mass ideology, the industrialists of America were a metaphorical Atlas of Greek mythology, holding up the sky, whom Galt convinces to "shrug," by refusing to lend their productive genius to the regime any longer.

In the novel, Galt is the son of an Ohio garage mechanic, who leaves home at age twelve and begins college at Patrick Henry University at age sixteen. There he befriends Francisco d'Anconia and Ragnar Danneskjöld. John Galt is double-majoring in physics and philosophy. After graduating, Galt becomes an engineer at the Twentieth Century Motor Company, where he designs a revolutionary new motor powered by ambient static electricity. When the company owners decide to run the factory by the collectivist maxim, "From each according to his ability, to each according to his need," Galt refuses to work there any longer and abandons his motor. These events all occur before the novel begins, but are described by the characters.

During the main storyline of the book, Galt has secretly organized a strike by the world's creative leaders, including inventors, artists and businessmen, in an effort to "stop the motor of the world," thereby bringing about the collapse of the collectivist society. While working incognito as a laborer for Taggart Transcontinental railroad, he travels to visit the key figures that he has not yet recruited, systematically convincing them to join the strike. This strike is not revealed immediately within the story, but forms the backdrop of the novel as a mystery which protagonist Dagny Taggart seeks to uncover, with Galt as her antagonist. The strikers have created their own secret enclave known as "Galt's Gulch," a town secluded in a Colorado mountain valley, based on Ouray, Colorado. While in the valley, Taggart develops a romantic relationship with Galt, although she refuses to join the strike. After Taggart returns home, Galt takes over the airwaves to deliver a lengthy speech explaining the irrationality of collectivism and offering his own philosophy (actually a summary of Rand's Objectivist philosophy) as an alternative. Galt spoke against what he saw as the "evil" of collectivism and ideas of collective sin and guilt, and said they should be replaced by "enlightened" selfishness and individualism. Seeking Galt after the speech, Taggart accidentally leads the authorities to him, and he is arrested. Taggart and the strikers rescue Galt as he is being tortured by the government. They return to Galt's Gulch and prepare to build their own society as the collectivist government collapses.

The book's opening line "Who is John Galt?" becomes an expression of helplessness and despair at the current state of the novel's fictionalized world. Before finding the real John Galt, Dagny Taggart hears a number of legends of Galt. After eventually joining his cause, she learns that all of the stories have an element of truth to them.

The Galt character has been compared to various iconic figures from literature and history. In the novel itself, he is compared with Prometheus from the Greek myths. In contrast to Prometheus, who suffered for bringing a great benefit to mankind, Galt refuses to suffer and withdraws the benefit instead. Rand scholar Mimi Reisel Gladstein sees similarities to the figures of Arthur and Galahad from the Arthurian legends.

Critics of the character have called Rand's characterization of him unrealistic, calling him "more a symbol than a person" and "two-dimensional." Mimi Reisel Gladstein describes Galt as "more icon than character." Rand's own notes indicate that she expected the character to have "[n]o progression" and "no inner conflict" because he was "integrated (indivisible) and perfect."

After the publication of Atlas Shrugged, Rand fell into a "deep depression" and chided herself for not being more like her ideal man, remarking "John Galt wouldn’t feel this, he would know how to handle this. I don’t know."

Literature professor Shoshana Milgram traces the origins of the character to adventure stories that Rand read as a child, including the French novels La Vallée Mystérieuse and Le Petit Roi d'Ys. Rand also owned a copy of a 1940 novel with characters named Jed and John Peter Galt. There was a 19th Century Scottish novelist of the same name, but Milgram says that any connection to the character is "highly unlikely." Milgram also notes that the name Rand originally picked for her character was Iles Galt.

Author Justin Raimondo has found parallels between Atlas Shrugged and The Driver, a 1922 novel by Garet Garrett. Garrett's novel has a main character named Henry M. Galt. This Galt is an entrepreneur who takes over a failing railway, turning it into a productive and profitable asset for the benefit of himself and the rest of the nation. The general population and government turn against him instead of celebrating his success. Raimondo also notes that in The Driver, some characters ask, "Who is Henry M. Galt?", similar to the question "Who is John Galt?" that plays an important role in Atlas Shrugged.

At least two real people of Rand's acquaintance have been suggested as partial inspirations for Galt. Rand denied any connection to her friend John Gall, a conservative attorney, but did claim some inspiration came from her husband, Frank O'Connor.