He was born in Jordan Falls, Shelburne County, on Nova Scotia's South Shore. He was the oldest son and one of eighteen children of Hugh McKay, a fisherman and a farmer, and Ann McPherson McKay. Both of his parents were of Scottish descent. He was named after his grandfather, Captain Donald McKay, a British officer, who after the Revolutionary war moved to Nova Scotia from the Scottish Highlands.
Early years as a shipbuilder
In 1826 McKay moved to New York, working for shipbuilders Brown & Bell and was an apprentice of Isaac Webb from 1827 to 1831. After 1832 he did some freelance jobs for Webb and Smith & Dimon. McKay also freelanced for Brown & Bell at their Wescasset's shipyard. In 1840 at Newburyport, he was contracted to finish Delia Walker, 427 tons, for John Currier, Jr. Currier was very impressed with McKay and offered him a five year contract, which McKay refused driven by desire to own his own business.
In 1841, William Currier offered McKay to become a partner of what would become Currier & McKay shipyard in Newburyport. The partnership did not last long and soon McKay found himself in McKay & Pickett, building the packet St. George. The partnership with William Pickett was "pleasant and profitable", but after the success of the Joshua Bates the shipyard became too small for McKay's ambitions and he was convinced by Enoch Train to move to East Boston and open his own business.
Ships built before 1845
1840 Delia Walker, 427 tons, McKay finished her for John Currier, Jr.
1841 Mary Broughton, 323 tons, barque, built by Currier & McKay.
1842 Ashburton, 449 tons, ship, build by Currier & McKay.
1842 Rio Trader Courier, early clipper trading ship, 380 tons OM was the first ship fully designed and built by Donald McKay himself, as a partner in the firm of Currier & McKay, on a commission from Andrew Foster & Son, New York. She was built at Newburyport, Massachusetts. At the time it was rather unusual for a such advanced vessel to be built outside of New York or Baltimore. She was employed in the Rio coffee trade and made a big deal of money to her owners, but most importantly brought a much needed fame to McKay.
1843 St. George, 845 tons, pioneer packet of Red Cross Line, built by McKay & Pickett.
1844 John R. Skiddy, 930 tons, packet, built by McKay & Pickett.
1844 Joshua Bates, 620 tons, pioneer packet of Enoch Train's White Diamond Line. The White Diamond Line was one of the most important Atlantic emigrant routes from Europe to North America at the time. Built by McKay & Pickett.
East Boston shipyard
McKay Shipyard, East Boston, ca.1855
In 1845 McKay, as a sole owner, established his own shipyard on Border Street, East Boston, where he built some of the finest American ships for almost 25 years. One of his first large orders was building five large packet ships for Enoch Train's White Diamond line between 1845 and 1850.
Between 1845 and 1850 McKay built five large packet ships for Enoch Train's White Diamond line: Washington Irving, Anglo Saxon, Anglo American, Daniel Webster, and Ocean Monarch. The Ocean Monarch was lost to fire on August 28, 1848, soon after leaving Liverpool and within sight of Wales; over 170 of the passengers and crew perished. The Washington Irving carried Patrick Kennedy, grandfather of Kennedy family patriarch Joseph P. Kennedy, Sr., to Boston in 1849.
1851 Flying Fish, extreme clipper, 1505 tons OM. She was launched at East Boston, Massachusetts, for Messrs. Sampson & Tappan, Boston. She wrecked on the 23rd of November 1958 off Fuzhou, China en route to New York with a cargo of tea. The wreck was sold to a Manilla merchant. After she was rebuilt at Whampoa, China she was renamed the El Bueno Suceso.
1852 Sovereign of the Seas, extreme clipper, 2421 tons OM. At the time she was fastest sailing ship ever built. She was wrecked in the Malacca Straits in 1859.
1852 Westward Ho!, extreme clipper, 1650 tons OM, burned in Callao in 1864.
1853 Empress of the Seas, extreme clipper, 2200 tons OM, burned in Australia in 1881.
1853 Star of Empire, extreme clipper, 2050 tons OM, built for the Boston and Liverpool packet line of Enoch Train & Co. In 1857, laden with guano, she broke to pieces on Currituck Beach, N. C.
1853 Chariot of Fame, extreme clipper, 2050 tons OM, 220 ft. She was launched at East Boston, Massachusetts, for Enoch Train & Co. Per Richard McKay sources, sold in 1862 and came to her end in January, 1876, being abandoned or lost at sea en route from Chincha Islands to Cork. 
Great Republic (1853)
1853 Great Republic, extreme clipper barque, 4555 tons OM – largest clipper ship ever built
1853 Romance of the Sea, extreme clipper, 1782 tons OM. She was launched at East Boston, Massachusetts, for George B. Upton and employed in the California Trade. She disappeared en route to San Francisco after having left Hong Kong 31st of December 1862. 
1854 Lightning, extreme clipper, 2083 tons OM, built for Messrs, Baines & Co. She burned while loading wool at Geelong, Australia on the 31st of October 1869.
1854 James Baines, extreme clipper, 2525 tons OM, built for Messrs, Baines & Co.
1854 Blanche Moore, extreme clipper, 1787 tons OM
1854 Santa Claus, medium clipper, 1256 tons OM
1854 Benin, barque, 692 tons.
1854 Commodore Perry, medium clipper, 1964 tons OM, built for Black Ball Line, burned near Bombay on 27 August 1869.
1854 Japan, medium clipper, 1964 tons OM, built for Messrs, Baines & Co.
1855 Donald McKay, extreme clipper, 2594 tons OM, 266 ft, built for Messrs, Baines & Co., last extreme clipper ship built by Donald McKay, burned and broken up in 1888.
1855 Zephyr, medium clipper, 1184 tons OM
1855 Defender, medium clipper, 1413 tons OM
1856 Henry Hill, medium clipper barque, 568 tons OM
1856 Mastiff, medium clipper, 1030 tons OM. She was launched at East Boston, Massachusetts, for George B. Upton for the California and China trade. She was lost to a fire en route for the Sandwich Islands in the South Pacific on the 15th of September 1859. The entire crew and all passengers were rescued by the British ship HMS Achilles and brought to Honolulu.
1856 Minnehaha, medium clipper, 1695 tons OM
Glory of the Seas (1869)
1856 Amos Lawrence, medium clipper, 1396 tons OM
1856 Abbott Lawrence, medium clipper, 1497 tons OM
1856 Baltic, medium clipper, 1372 tons OM, 188 feet, built for Zerega&Co of New York.
1856 Adriatic, medium clipper, 1327 tons OM, built for Zerega&Co of New York. She ran aground, off Whale Cove, on Digby Neck Peninsula, Nova Scotia, Canada on the 24th December 1859.
63 days and 3 hours from Melbourne, Australia, to Liverpool, England
Sovereign of the Seas posted the fastest speed ever by a sailing ship – 22 kts. in 1854.
Champion of the Seas set the record of 465 miles in 24 hours in December 1854; this record stood until 1984.
James Baines logged a speed of 21 knots (June 18, 1856)
Flying Cloud made two 89-day passages New York to San Francisco
Bald Eagle set the record of 78 days 22 hours for a fully laden ship from San Francisco to New York.
In 1869, under financial pressure from previous losses, McKay sold his shipyard and worked for some time in other shipyards. He retired to his farm near Hamilton, Massachusetts, spending the rest of his life there. He died in 1880 in relative poverty and was buried in Newburyport.
McKay's designs were characterized by a long fine bow with increasing hollow and waterlines. He was perhaps influenced by the writings of John W. Griffiths, designer of the China clipper Rainbow in 1845. The long hollow bow helped to penetrate rather than ride over the wave produced by the hull at high speeds, reducing resistance as hull speed is approached. Hull speed is the natural speed of a wave the same length as the ship, in knots, , where LWL = Length of Water Line in feet. His hulls had a shorter afterbody, putting the center of buoyancy farther aft than was typical of the period, as well as a full midsection with rather flat bottom. These characteristics led to lower drag at high speed compared to other ships of similar length, as well as great stability which translated into the ability to carry sail in high winds (more power in extreme conditions). His fishing schooner design was even more radical than his clippers, being a huge flat-bottomed dinghy similar in form to 20th century planing boats. These design changes were not favorable for light wind conditions such as were expected on the China trade, but were profitable in the California and Australian trades.
Legacy and honors
Pan Am named one of their Boeing 747s Clipper Donald McKay in his honor.
There is a monument to McKay in South Boston, near Fort Independence, overlooking the channel, that lists all his ships. There were more than thirty ships listed.