MacDonald was born at Fort Astoria in what was then known as the Columbia District or Oregon Country (a disputed area dominated by the Hudson's Bay Company and the Pacific Fur Company), to Archibald MacDonald, a Scottish Hudson's Bay Company fur trader, and Raven (also known as Princess Sunday), a Chinook Indian, daughter of Chief Concomly, a leader of Chinook people from the Cascade Mountains and Cape Disappointment.

As a child, he met three shipwrecked Japanese sailors (among them, Otokichi). MacDonald's Indian relatives told him that their ancestors had come from Asia and the boy developed a fascination with Japan, theorizing that it might be home of his distant relatives.[1]

He was educated at the Red River Academy in Manitoba, Canada, and secured a job as a bank clerk, following the wishes of his father.

A restless man, he soon quit his bank job and decided that he would visit Japan. Despite knowing the strict isolationist Japanese policy of the time, which meant death or imprisonment for foreigners who set foot on Japanese soil, he signed on as a sailor on the whaling ship Plymouth in 1845. In 1848, he convinced the captain of the Plymouth to set him to sea on a small boat off the coast of Hokkaid?. On July 1, he came ashore on the island of Rishiri where he pretended he had been shipwrecked. He was caught by Ainu people, who remitted him to the Daimyo of Matsumae. He was then sent to Nagasaki, the only port allowed to conduct limited trade with the Dutch and Portuguese.

Since more and more American and British ships had been approaching Japanese waters, and nobody in Japan spoke English with any sort of fluency, fourteen men were sent to study English under him. These men were samurai, who had previously learned Dutch and had been attempting to learn English for some time from secondhand sources, such as Dutch merchants who spoke a little of the language. The brightest of these men, a sort of language genius, was Einosuke Moriyama.

MacDonald stayed in confinement, in Nagasaki, for 10 months, during which he also studied Japanese, before being taken aboard a passing American warship. In April 1849, in Nagasaki, MacDonald was remitted together with fifteen other shipwrecks to captain James Glynn on the American warship USS Preble which had been sent to rescue stranded sailors. Glynn later urged that a treaty should be signed with Japan, "if not peaceably, then by force".

Upon his return to America, MacDonald made a written declaration to Congress, explaining that the Japanese society was well policed, and the Japanese people well behaved and of the highest standard. He continued his career as a sailor.

After travelling widely, MacDonald returned to Lower Canada and, in 1858, went to the new colony of British Columbia where he set up a packing business in the Fraser River gold fields and later in the Cariboo, in 1864. He also participated in an expedition that explored parts of Vancouver Island.

Although his students had been instrumental in the negotiations to open Japan with Commodore Perry and Lord Elgin, he found no real recognition of his achievements. His notes of the Japanese adventure were not published until 1923, 29 years after his death. He died a poor man in Washington state in 1894, while visiting his niece. His last words were reportedly "Sayonara, my dear, sayonara…"

MacDonald rests today in the Ranald McDonald Cemetery, Ferry County, Washington (48?56'51"N, 118?45'43"W) . Ranald McDonald's Grave is 18 miles northwest of Curlew Lake State Park on Mid Way Road and is a satellite of Osoyoos Lake State Park. The grave bears the following inscription:

RANALD MacDONALD 1824-1894 SON OF PRINCESS RAVEN AND ARCHIBALD MacDONALD HIS WAS A LIFE OF ADVENTURE SAILING THE SEVEN SEAS WANDERING IN FAR COUNTRIES BUT RETURNING AT LAST TO REST IN HIS HOMELAND. SAYONARA-FAREWELL ASTORIA EUROPE JAPAN THE CARIBOO AUSTRALIA? FT?COLVILLE

To this day, there are memorials to Ranald MacDonald in Rishiri and in Nagasaki.

There is also a memorial to him in his birthplace located where Fort Astoria used to stand in Astoria, Oregon.