This paper describes the development of a distributed planning and control strategy for multiple mobile robots in a leader-follower formation framework, which combines together formation planning, navigation and active obstacle avoidance. A layered formation control architecture consisting of functional behaviours based on the relative motion states of the robots, classified into two levels is developed. The supervisor level in the framework handles the higher-level missions such as formation and inter-robot communication, and the lower level deals with the dynamic control of robots during navigation. Dynamic role switching mechanism through the exchange of leadership is incorporated in this work to tackle the problem of obstacle avoidance in the follower path. A state based modelling framework, where the functional behaviours/motion states of the layered approach are modelled using the augmented finite state machine (AFSM) concept, is also presented in this paper. The proposed approach is validated through state based simulations via Simulink/Stateflow environment and experiments using commercially available robot research platforms and the results obtained are discussed. © 2010 Inderscience Enterprises Ltd.