At the age of 15, MacDonald was apprenticed to a draper in Dingwall and then moved on to the Royal Clan Tartan and Tweed Warehouse in Inverness, an establishment owned by William Mackay.

[5] He rose rapidly through the noncommissioned ranks, and had already been a Colour Sergeant for some years when his distinguished conduct in the presence of the enemy during the Second Afghan War led to his being offered the choice of being recommended for the Victoria Cross or commissioned in his regiment; he chose the latter.

[7] MacDonald served as a subaltern in the First Boer War (1880–81), and at the Battle of Majuba Hill, where he was made prisoner, his bravery was so conspicuous that General Joubert gave him back his sword.

[8][7] During the Mahdist War, MacDonald commanded a brigade of the Egyptian army in the Dongola Expedition[broken anchor] (1896), and subsequently distinguished himself at Abu Hamed (7 August 1897) and Atbara (8 April 1898).

While in South Africa he prepared the way for Lord Roberts's march to the relief of Kimberley by seizing Koodoesberg (5–8 February 1900), and by this demonstration the attention of the Boers was distracted from the main advance.

In early 1902 he was appointed Commander-in-Chief of British troops in Ceylon (now Sri Lanka) with the temporary rank of major general while so employed,[19] and he arrived there and took up the command on 26 March 1902.

[20] Historian Ronald Hyam comments that "Ceylon furnished MacDonald with a lethal combination of a military command which was inactive and uninteresting, and a community of boys who were interesting and very active.

[22] Rumours began circulating that he was having a sexual relationship with the two teenage sons of a Burgher named De Saram, and that he was patronising a "dubious club" attended by British and Sinhalese youths.

Matters came to a crisis when a tea-planter informed Ridgeway that he had surprised Sir Hector in a railway carriage with four Sinhalese boys; further allegations followed from other prominent members of the colonial establishment, with the threat of even more to come, involving up to seventy witnesses.

Ridgeway advised MacDonald to return to London, his main concern being to avoid a massive scandal: "Some, indeed most, of his victims ... are the sons of the best-known men in the Colony, English and native", he wrote, noting that he had persuaded the local press to keep quiet in hopes that "no more mud" would be stirred up.

[26] The case file is thought to have been destroyed soon after his suicide;[21] a Government Commission released a report on the tragedy on 29 June 1903: In reference to the grave charges made against the late Sir Hector MacDonald, we, the appointed and undersigned Commissioners, individually and collectively declare on oath that, after the most careful, minute, and exhaustive inquiry and investigation of the whole circumstances and facts connected with the sudden and unexpected death of the late Sir Hector MacDonald, unanimously and unmistakably find absolutely no reason or crime whatsoever which would create feelings such as would determine suicide, in preference to conviction of any crime affecting the moral and irreproachable character of so brave, so fearless, so glorious and unparalleled a hero: and we firmly believe the cause which gave rise to the inhuman and cruel suggestions of crime were prompted through vulgar feelings of spite and jealousy in his rising to such a high rank of distinction in the British Army: and, while we have taken the most reliable and trustworthy evidence from every accessible and conceivable source, have without hesitation come to the conclusion that there is not visible the slightest particle of truth in foundation of any crime, and we find the late Sir Hector MacDonald has been cruelly assassinated by vile and slandering tongues.

While honourably acquitting the late Sir Hector MacDonald of any charge whatsoever, we cannot but deplore the sad circumstances of the case that have fallen so disastrously on one whom we have found innocent of any crime attributed to him.

[30] During the First World War the German High Command attempted to capitalise on his continuing popularity among Scottish rank and file in the British Army by fostering the rumours that MacDonald was von Mackensen.

[31] Over a century after his death it is widely asserted by his many modern supporters that the crofter's son was the victim of a frameup by the British upper class, motivated by jealousy and snobbery, with the allegations of homosexuality and pedophilia a fabrication.

There were comparable rumours about other commanders from the British upper class, including "Chinese" Gordon and Field Marshals Montgomery and Auchinleck, but they were protected by the loyalty of their staff; only MacDonald was required to face a court martial.