Born in Cummertrees, Dumfries, Scotland, he was the second son of the 9th Marquess of Queensberry and brother of Lord Alfred Douglas, the lover of Oscar Wilde.

In his youth Douglas served in the Royal Navy as a midshipman, then in the British Army as 2nd lieutenant in the 3rd (Militia) Battalion of the King's Own Scottish Borderers from 1889 to 1891.

The atheist ninth Marquess disowned him for marrying a clergyman's daughter in 1893 before going to Australia, but effected a reconciliation when he returned.

During the Oscar Wilde trials in 1895, his father assaulted him on a London street, leading to both men being bound over to keep the peace for £500 (worth at least £29,945 in 2005).

"[4] He dissipated what remained of the family fortune in less than eighteen months and was sued for bankruptcy in December 1901.