Macleod was born in Clunie, near Dunkeld in central Scotland. Soon after he was born, his Father Robert Macleod, a clergyman, was transferred to Aberdeen, where John attended Aberdeen Grammar School and enrolled in the study of Medicine at the University of Aberdeen. At the University of Aberdeen, one of MacLeod's principal teachers was the young Professor John Alexander MacWilliam. He obtained a PhD in Medicine in 1898 and then spent a year studying biochemistry at the University of Leipzig, Germany, on a travelling scholarship. After returning to Britain, he became a demonstrator at the London Hospital Medical School, where in 1902 he was appointed lecturer in biochemistry. In the same year, he was awarded a doctorate in public health from Cambridge University. Around that time he published his first research article, a paper on phosphorus content in muscles.

Macleod was a prolific Writer. His first academic article was a paper on phosphorus content in muscles published in 1899. During his career he authored or co-authored over 200 papers and eleven books. Among them are:

In 1903, Macleod emigrated to the United States and became a lecturer in physiology at the Western Reserve University (today's Case Western Reserve University) in Cleveland, Ohio, where he remained for 15 years. During World War I, he performed various war-time duties and served as a physiology lecturer for part of the 1916 winter semester at the McGill University in Montreal, Canada. After the war, he went on to teach physiology at the University of Toronto, where he became Director of the physiology lab and an assistant to the dean of the medical faculty. He researched various topics in physiology and biochemistry, among which were the chemism of Mycobacterium tuberculosis, electroshocks, creatinine metabolism and blood circulation in the brain. In 1905 he became interested in carbohydrate metabolism and diabetes, publishing a series of scientific papers and several monographs on the subject from then on. Additionally, Macleod was a popular lecturer and an influential contributor to the development of the six-year course in Medicine at the University of Toronto.

John Macleod was a distinguished Physiologist even before the discovery of insulin. He was elected a member of the Royal Society of Canada in 1919 and President of American Physiological Society in 1921. Among the recognitions he received after 1923 were memberships of the Royal Society and the Royal Society of Edinburgh, corresponding membership of the German Academy of Sciences Leopoldina and honorary membership of the Regia Accademia Medica. His reputation in Canada remained under the influence of Banting's story for decades, so Macleod was not esteemed there.

At the end of 1920, Macleod was approached by Frederick Grant Banting, a young Canadian physician who had the idea of curing diabetes using an extract from a pancreas whose functioning had been disrupted. Macleod was not enthusiastic, because (unlike Banting) he knew about unsuccessful experiments in this direction by other researchers. He thought it more likely that the nervous system had a crucial role in regulating blood glucose concentration. Even though Banting had virtually no experience of physiology, he managed to convince Macleod to lend him laboratory space during a vacation in Scotland that summer. In addition to the laboratory, Macleod provided experimental animals and his student Charles Herbert Best, who worked as a demonstrator. Macleod also advised on project planning and the use of analytical techniques, and assisted with the operation on the first dog. While Macleod was away, Banting and Best achieved a breakthrough: they isolated an internal secretion of the pancreas and succeeded in reducing the blood sugar level of another dog, whose pancreas had been surgically removed.

The first human clinical trial was unsuccessful. Banting was insufficiently qualified to participate and felt sidelined. By the winter of 1922, he was certain that all Macleod's colleagues were conspiring against him. Collip threatened to leave because of the strained atmosphere, but the encouragement of others who saw the potential of their research prevented escalation of the conflict. In January 1922, the team performed the first successful clinical trial, on 14-year-old Leonard Thompson, and it was soon followed by others. Although all the team members were listed as co-authors of their publications, Banting still felt overlooked, because Macleod took over the coordination of clinical trials and the acquisition of larger amounts of extract. Macleod's presentation at a meeting of the Association of American Physicians in Washington, D.C., on 3 May 1922 received a standing ovation, but Banting and Best refused to participate in protest. At that time, demonstrations of the method's efficiency drew huge public interest, because the effect on patients, especially children, who until then were bound to die, seemed almost miraculous. The pharmaceutical company Eli Lilly & Co. took over mass production, but without an exclusive license, as the patent was transferred to the British Medical Research Council to prevent exploitation.

The Nobel Committee reacted almost immediately to the first successful clinical trials. In the autumn of 1923, Banting and Macleod received the Nobel Prize in Physiology or Medicine, even though the long-term importance of the discovery was not yet apparent. They were nominated by the Danish Physiologist and Nobel laureate August Krogh, who had a diabetic wife and had visited Macleod's laboratory and taken the method back to Denmark. The committee judged that Macleod's work in interpreting the data, managing the clinical trials and providing a high level of public presentation were crucial for success, so they awarded the Nobel prize to both. Banting was furious, as he was convinced that Best should have received the other half, and he even thought of rejecting the prize. He was finally persuaded to accept it but gave half of his prize money to Best. Macleod in turn gave half of his to Collip. In 1972 the Nobel Foundation officially conceded that omitting Best was a mistake.

Macleod returned to Scotland in 1928 to become Regius Professor of Physiology (in succession to his former Teacher, Prof. John Alexander MacWilliam who retired in 1927) and later Dean of the University of Aberdeen Medical Faculty. Between 1929 and 1933 he was also a member of the Medical Research Council. He wrote a report on the discovery in 1922 to explain his side of the story, but otherwise refrained from active involvement in controversy about credit. Banting hated him passionately, and the two never spoke again.

Macleod did not continue to work on insulin, but he remained active as a researcher, lecturer and author. His last major contribution was a proof that the central nervous system does have an important role in maintaining carbohydrate metabolism balance, as was his original hypothesis. His theory about conversion of fats into carbohydrates remained unproven, despite his provision of several indirect proofs. He devoted his spare time to golf, motorcycling and painting. He was married to Mary W. McWalter, but they never had children. He died in 1935 in Aberdeen after several years of suffering from arthritis, despite which he remained active almost until his death. In 1933 he made a lecture tour of the US, and in 1934 he published the 7th edition of his book Physiology and Biochemistry in Modern Medicine.

After Banting's death in a plane crash in 1941, Best, with the help of his friends, continued to spread Banting's account of the discovery and tried to "write out" Macleod and Collip from the history books. Only in 1950 was the first independent revision of all sides of the story made, and it gave credit to all four members of the team. However, Macleod's public image remained tainted for decades after that. The 1973 British television drama Comets Among the Stars, for Example, portrayed him as dark and repulsive. The second dramatization of the discovery, Glory Enough for All (1988), at last portrayed him more objectively. By then it was commonly accepted that Banting's and Best's story was distorted, since more documentation had been made publicly available, and it made a precise reconstruction of the events possible. Until Best died, this documentation had been kept secret for over 50 years by the University of Toronto, whose administration wanted to avoid fueling the controversy.

His contribution to science is now recognized by the broad public, even in Canada. The auditorium of the Toronto University Medical Research Center was named in his honor, as was Diabetes UK's award for patients who survive for 70 years with diabetes. In 2012, he was inducted into the Canadian Medical Hall of Fame.