Agnes Macphail was born to Dougald McPhail and Henrietta Campbell in Proton Township, Grey County, Ontario on March 24, 1890. (Although her surname was spelled "McPhail" at birth, she discovered during a trip to Scotland that her family's surname had been "Macphail" and changed her name to reflect this.) She was raised in the Methodist Church, but converted to the Reorganized Latter Day Saint church as a teenager, the church of her missionary uncle.

She attended Owen Sound Collegiate and Vocational Institute for one year. Even though she did well she transferred to Stratford Normal School so she could board with a relative. She graduated in 1910 with a second class teacher's certificate. She applied for five positions and was accepted at all five. She claimed that this was not due to her competence but due to a scarcity of teachers at the time. She taught in several rural schools in such communities as Port Elgin, Honeywood and Newmarket.

After amendments to the Elections Act by the Conservative Party government in 1919, Macphail was elected to the House of Commons as a member of the Progressive Party of Canada for the Grey Southeast electoral district (riding) in the 1921 federal election. She was the first woman Member of Parliament (MP) in Canada. Macphail was re-elected in the 1925, 1926, and 1930 federal elections.

Macphail objected to the Royal Military College of Canada in 1924 on the grounds that it taught snobbishness and provided a cheap education for the sons of the rich and again in 1931 on pacifist grounds.

As a radical member of the Progressive Party, Macphail joined the socialist Ginger Group, faction of the Progressive Party that later led to the formation of the Co-operative Commonwealth Federation (CCF). She became the first President of the Ontario CCF in 1932. However, she left the CCF in 1934 when the United Farmers of Ontario pulled out, over fears of Communist influence in the Ontario CCF. While Macphail was no longer formally a CCF member, she remained close to the CCF MPs and often participated in caucus meetings. The CCF did not run candidates against Macphail in her three subsequent federal campaigns.

In the 1935 federal election, Macphail was again elected, this time as a United Farmers of Ontario–Labour MP for the newly formed Grey—Bruce riding. She was allowed to use the party's name, even after it stopped being a political organization in 1934. She was always a strong voice for rural issues. Macphail was also a strong advocate for penal reform and her efforts contributed to the launch of the investigative Archambault Commission in 1936. The final report became the basis for reform in Canadian penitentiaries following World War II. Macphail's concern for women in the Criminal justice system led her, in 1939, to found the Elizabeth Fry Society of Canada, named after British reformer Elizabeth Fry.

In the 1940 election, she was defeated. With the death of United Reform MP for Saskatoon City, Walter George Brown, a few days after the election, Macphail was recruited by the United Reform Movement to run in the by-election to fill the seat. On August 19, she was defeated by Progressive Conservative candidate Alfred Henry Bence. He received 4,798 votes, while Macphail placed second with 4,057 votes. It was her last federal campaign as a candidate.

Following a family tragedy in her home town, Macphail moved to the Toronto suburb of East York, Ontario and rejoined the Ontario CCF in 1942 becoming its farm organizer.

In the 1943 provincial election, Macphail was elected to the Legislative Assembly of Ontario as a member of the Ontario CCF representing the suburban Toronto riding of York East. She and Rae Luckock were the first women elected to the Ontario Legislature. She was the first woman sworn in as an Ontario Member of Provincial Parliament (MPP). Although defeated in the 1945 provincial election, she was elected again in the 1948 election. Macphail was responsible for Ontario's first equal-pay legislation, passed in 1951, but was unable to continue her efforts when she was defeated in elections later that year. At that time, Macphail was barely able to support herself through journalism, public speaking and organizing for the Ontario CCF.

Macphail never married. She died February 13, 1954, aged 63, in Toronto, just before she was to have been offered an appointment to the Canadian Senate. She is buried in Priceville, Ontario, with her parents and Gertha Macphail, one of her two sisters.