Rae was a native of Stromness in the Orkney Islands. After studying medicine at Edinburgh he went into the service of the Hudson's Bay Company as a doctor. In 1846 he first ventured on an expedition and in 1848 joined Sir John Richardson in searching for the North West Passage. In 1853, he was involved in exploring King William's Land, and made contact with the Inuit. From them he obtained valuable information about the fate of the lost expedition of Sir John Franklin. In 1860 he worked on the telegraph line to America, visiting Iceland and Greenland. In 1864 he made a further telegraph survey in the west of Canada. He is buried in St Magnus Cathedral, Kirkwall.