Macdonald's best known work, usually completed with Seth Raynor as his construction engineer, includes, but is not limited to:
Chicago GC, IL (1892) / Greenbrier, WV (1914, Old White course) / Mid Ocean Club, Bermuda (1921) / Monterey Peninsula, CA (1925, Dunes course) / National Golf Links, NY (1908) / Piping Rock, NY (1911) / Shinnecock Hills, NY (1901, redesign) / St Louis CC, MO (1914) / Sleepy Hollow, NY (1911) / The Creek, NY (1923) / Yale University, CT (1926).

Macdonald, often called the "Father of American Golf Architecture," was born in Niagara Falls, Ontario to naturalized American parents. His father was originally from Scotland and his mother was Canadian (part Mohawk). Macdonald grew up in Chicago, and in 1872 at age 16, was sent to St Andrews University in Scotland, where he took up golf. He was tutored by Old Tom Morris and developed into a very proficient player. Upon his return to Chicago in 1874, he became a successful stockbroker, but rarely played golf for the next 17 years.

Golf arrived in the United States in the late 1880s, and by 1892 Macdonald had convinced several associates to start playing. He founded the Chicago GC that same year, and in 1894 was a key player in the establishment of the USGA. The first official mens' championship of the USGA was the 1895 U.S. Amateur Championship, which Macdonald won by the still record margin of 12 up with 11 to play.

In 1900, Macdonald moved from Chicago to New York while still a stockbroker, and set about finding a site to build "the most noteworthy golf course" outside the British Isles. He eventually settled on a site in Southampton, Long Island, in 1906. Three years later, and helped by $1,000 donations from 70 founder members, the National Golf Links of America opened for play. Many of its holes were Macdonald's version of famous holes from courses in Britain, a pattern he would repeat on later layouts. Macdonald believed there were only about 25 hole designs that could be employed, and that the best versions of each should guide the construction of any new golf course. On Macdonald-designed courses, there are invariably versions of the Road Hole, the Redan and the Eden, as well as a punchbowl green, among other features. Macdonald did not duplicate the originals, but adapted them to fit the specific sites on which he worked.

With the National Golf Links, Macdonald began collaborating with civil engineer, Seth Raynor, and their association endured from that time onward. Raynor learnt everything he knew about golf course design from his mentor Macdonald, and Macdonald eventually handed him the reins of his course design business in 1915. Macdonald outlived Raynor, who died of pneumonia, aged 51.