Mackenzie was born in Stornoway in the Hebrides. In 1774 his family moved to New York, and then to Montreal in 1776 during the American Revolution. In 1779 he obtained a job with the North West Company, on whose behalf he travelled to Lake Athabasca and founded Fort Chipewyan in 1788. He discovered the Mackenzie River on July 10, 1789, following it to its source in hope of finding the Northwest Passage to the Pacific Ocean. Although he ended up discovering the Arctic Ocean, he named the river "Disappointment River" as it did not lead to Cook Inlet in Alaska as he had expected. The river was later renamed in his honour.
In 1791 he travelled to England to study the new advances in the measurement of longitude. Upon his return in 1792 he set out once again to find a route to the Pacific, and in 1793 he became the first European to cross both the Continental Divide and the Rocky Mountains, and reached the Pacific coast of Canada on July 22 of that year becoming the first Euro-American to complete a transcontinental crossing north of Mexico.
He was knighted for his efforts in 1802, and served in the legislature of Lower Canada from 1804 to 1808. In 1812, he married and retired to Scotland. Mackenzie died in 1820 of Bright's disease.