George MacDonald was born on 10 December 1824 at Huntly, Aberdeenshire, Scotland. His father, a farmer, was one of the MacDonalds of Glen Coe and a direct descendant of one of the families that suffered in the massacre of 1692.
MacDonald grew up in an unusually literate environment: one of his maternal uncles was a notable Celtic scholar, editor of the Gaelic Highland Dictionary and collector of fairy tales and Celtic poetry. His paternal grandfather had supported the publication of an Ossian edition, the controversial Celtic text believed by some to have contributed to the starting of European Romanticism. MacDonald's step-uncle was a Shakespeare scholar, and his paternal cousin another Celtic academic. Both his parents were readers, his father harbouring predilections for Newton, Burns, Cowper, Chalmers, Coleridge, and Darwin, to quote a few, while his mother had received a classical education which included multiple languages.
An account cited how the young George suffered lapses in health in his early years and was subject to problems with his lungs such as asthma, bronchitis and even a bout of tuberculosis. This last illness was considered a family disease and two of MacDonald's brothers, his mother, and later three of his own children actually died from the ailment. Even in his adult life, he was constantly travelling in search of purer air for his lungs.
MacDonald grew up in the Congregational Church, with an atmosphere of Calvinism. However, his family was atypical, with his paternal grandfather a Catholic-born, fiddle-playing, Presbyterian elder; his paternal grandmother an Independent church rebel; his mother was a sister to the Gaelic-speaking radical who became moderator of the disrupting Free Church, while his step-mother, to whom he was also very close, was the daughter of a Scottish Episcopalian priest.
MacDonald graduated from the University of Aberdeen in 1845 with a master's degree in chemistry and physics. He spent the next several years struggling with matters of faith and deciding what to do with his life. His son, biographer Greville MacDonald stated that his father could have pursued a career in the medical field but he speculated that lack of money put an end to this prospect. It was only in 1848 when MacDonald began theological training at Highbury College for the Congregational ministry.
MacDonald's first novel David Elginbrod was published in 1863.
George MacDonald is often regarded as the founding father of modern fantasy writing. George MacDonald's best-known works are Phantastes, The Princess and the Goblin, At the Back of the North Wind, and Lilith (1895), all fantasy novels, and fairy tales such as "The Light Princess", "The Golden Key", and "The Wise Woman". "I write, not for children," he wrote, "but for the child-like, whether they be of five, or fifty, or seventy-five." MacDonald also published some volumes of sermons, the pulpit not having proved an unreservedly successful venue.
After his literary success, MacDonald went on to do a lecture tour in the United States in 1872–1873, after being invited to do so by a lecture company, the Boston Lyceum Bureau. On the tour, MacDonald lectured about other poets such as Robert Burns, Shakespeare, and Tom Hood. He performed this lecture to great acclaim, speaking in Boston to crowds in the neighborhood of three thousand people.
MacDonald served as a mentor to Lewis Carroll: it was MacDonald's advice, and the enthusiastic reception of Alice by MacDonald's many sons and daughters, that convinced Carroll to submit Alice for publication. Carroll, one of the finest Victorian photographers, also created photographic portraits of several of the MacDonald children. MacDonald was also friends with John Ruskin, and served as a go-between in Ruskin's long courtship with Rose La Touche. While in America he was befriended by Longfellow and Walt Whitman.
MacDonald's use of fantasy as a literary medium for exploring the human condition greatly influenced a generation of notable authors, including C. S. Lewis, who featured him as a character in his The Great Divorce. In his introduction to his MacDonald anthology, Lewis speaks highly of MacDonald's views:
This collection, as I have said, was designed not to revive MacDonald's literary reputation but to spread his religious teaching. Hence most of my extracts are taken from the three volumes of Unspoken Sermons. My own debt to this book is almost as great as one man can owe to another: and nearly all serious inquirers to whom I have introduced it acknowledge that it has given them great help—sometimes indispensable help toward the very acceptance of the Christian faith. ...
I know hardly any other writer who seems to be closer, or more continually close, to the Spirit of Christ Himself. Hence his Christ-like union of tenderness and severity. Nowhere else outside the New Testament have I found terror and comfort so intertwined. ...
In making this collection I was discharging a debt of justice. I have never concealed the fact that I regarded him as my master; indeed I fancy I have never written a book in which I did not quote from him. But it has not seemed to me that those who have received my books kindly take even now sufficient notice of the affiliation. Honesty drives me to emphasize it.
Others he influenced include J. R. R. Tolkien and Madeleine L'Engle. MacDonald's non-fantasy novels, such as Alec Forbes, had their influence as well; they were among the first realistic Scottish novels, and as such MacDonald has been credited with founding the "kailyard school" of Scottish writing.
Chesterton cited The Princess and the Goblin as a book that had "made a difference to my whole existence", in showing "how near both the best and the worst things are to us from the first... and making all the ordinary staircases and doors and windows into magical things."
In 1877 he was given a civil list pension. From 1879 he and his family moved to Bordighera, in a place much loved by British expatriates, the Riviera dei Fiori in Liguria, Italy, almost on the French border. In that locality there also was an Anglican church, All Saints, which he attended. Deeply enamoured of the Riviera, he spent 20 years there, writing almost half of his whole literary production, especially the fantasy work. MacDonald founded a literary studio in that Ligurian town, naming it Casa Coraggio (Bravery House). It soon became one of the most renowned cultural centres of that period, well attended by British and Italian travellers, and by locals, with presentations of classic plays and readings of Dante and Shakespeare often being held.
In 1900 he moved into St George's Wood, Haslemere, a house designed for him by his son, Robert, its building overseen by his eldest son, Greville.
George MacDonald died on 18 September 1905 in Ashtead, Surrey, England. He was cremated in Woking, Surrey, England and his ashes were buried in Bordighera, in the English cemetery, along with his wife Louisa and daughters Lilia and Grace.