He was born in Calgary, Alberta.
McFarlane was first published in 1984 pencilling a backup feature for the comic book Coyote. He rose to prominence producing work for both Marvel Comics and their rival, DC, on such books as Infinity Inc., Incredible Hulk and Detective Comics. His style was a blend of popular artistic influences including popular but irregular pencillers like Michael Golden and Art Adams. He eventually became the artist for Marvel's The Amazing Spider-Man. Illustrating the stories of writer David Micheline McFarlane's style came to define the character of Spider-Man for the early 1990s. He left the title after a few years only to be given his own title to write and illustrate: Spider-Man. Spider-Man #1, the fifth ongoing comic book featuring the character at the time, sold more than 2.5 million copies, due to successful marketing by Marvel including variant covers, bagged editions, and the dawn of the speculators market.
After a little more than a year producing Spider-Man, McFarlane took a hiatus from comics. During this time he and six other then-popular artists decided to form a comic company of their own. These seven artists formed Image Comics. Due to their inexperience with the publishing side of the business as well as writing the group was initially beset by production delays, incomprehensible scripts tying together loose collection of pin-ups and criticism from numerous reviewers. Despite this McFarlane's title Spawn became one of the best-selling titles and has drawn the attention of a variety of licensers. McFarlane chose to create his own toy company in 1994. New Line Cinema made a feature film of his character and an animated series was broadcast on HBO.
In late 2001, McFarlane revealed a new logo for the Edmonton, Alberta NHL franchise of which he is a part-owner.