Born in Calgary, Alberta, McCarthy attended the Ontario College of Art from 1926 to 1930, where she was awarded various scholarships and prizes. She became a Teacher shortly thereafter and taught most frequently at Central Technical School in downtown Toronto from 1932 until she retired in 1972. She spent most of her life living and working in Scarborough (now a Toronto district), Ontario, though she travelled abroad extensively and painted the landscapes of various countries, including: Costa Rica, Spain, Italy, Japan, India, England, and Ireland. McCarthy was nonetheless probably best known for her Canadian landscapes and her depictions of Arctic icebergs. In 1989, she graduated from the University of Toronto Scarborough with a B.A in English.

McCarthy also penned three autobiographies, chronicling the various stages of her life: A Fool in Paradise (Toronto: MacFarlane, Walter & Ross, 1990), The Good Wine (Toronto: MacFarlane, Walter & Ross, 1991), and Ninety Years Wise (Toronto: Second Story Press, 2004). She was made a member of the Royal Canadian Academy of Arts. She was the recipient of the Order of Ontario, the Order of Canada, honorary degrees from the University of Calgary, the University of Toronto, Trent University, the University of Alberta, and Nipissing University, an honorary fellowship from the Ontario College of Art and Design and also had a gallery named in her honour at the University of Toronto Scarborough.