McLoughlin was born in Rivière-du-Loup, Quebec, of Irish (his grandfather came from Sharagower in the Inishowen peninsular of County Donegal), Scottish, and French Canadian descent. He lived with his great uncle, Colonel William Fraser, for a while as a child. Though baptized Roman Catholic, he was raised Anglican and in his later life he returned to the Roman Catholic faith. In 1798, he began to study medicine with Sir James Fisher of Quebec. After studying for 4½ years he was granted a license to practice medicine on April 30, 1803. He was hired as a physician at Fort William, Ontario (now Thunder Bay), a fur-gathering post of the North West Company on Lake Superior; there he became a trader and mastered several Indian languages.
In 1814 he became a partner in the company. In 1816 McLoughlin was arrested for the murder of Robert Semple, the governor of the Red River Colony, after the Battle of Seven Oaks (1816), though it is often claimed he stood in proxy for some Indians who were blamed. He was tried on October 30, 1818, and the charges were dismissed. McLoughlin was instrumental in the negotiations leading to the North West Company's 1821 merger with the Hudson's Bay Company. He was promoted to the Lac la Pluie district temporarily shortly after the merger.
 The Columbia DistrictJohn McLoughlin John McLoughlin, National Statuary Hall Collection, statue
In 1824 the Hudson's Bay Company appointed McLoughlin as Chief Factor of the Columbia District (roughly parallel to what Americans know as the Oregon Country), with Peter Skene Ogden appointed to assist him. At the time, the region was under joint occupation of both the United States and Britain pursuant to the Treaty of 1818. Upon his arrival, he determined that the headquarters of the company at Fort Astoria (now Astoria, Oregon) at the mouth of the Columbia River was unfit. The York Factory Express trade route evolved from an earlier express brigade used by the North West Company between Fort George (originally Fort Astoria founded in 1811 by John Jacob Astor's American Fur Company), at the mouth of the Columbia River, to Fort William on Lake Superior.
In 1821 the North West Company was forcibly merged (at the behest of the British government) into the Hudson's Bay Company after armed conflict in the Red River Settlement between the two companies.George Simpson, director of Hudson's Bay Company, visited the Columbia District in 1824-25, journeying from York Factory. He investigated a quicker route than previously used, following the Saskatchewan River and crossing the mountains at Athabasca Pass. This route was thereafter followed by the York Factory Express brigades.
McLoughlin built Fort Vancouver (now Vancouver, Washington) as a replacement on the opposite side of the Columbia across from the mouth of the Willamette River, at a site chosen by Sir George Simpson. The post was opened for business on March 19, 1825. From his Columbia Department headquarters in Fort Vancouver he supervised trade and kept peace with the Indians, inaugurated salmon and timber trade with Mexican controlled California and Hawaii, and supplied Russian America with produce.
By 1825 there were usually two brigades, each setting out from opposite ends of the route, Fort Vancouver in the Columbia District on the lower Columbia River and the other from York Factory on Hudson Bay, in spring and passing each other in the middle of the continent. Each brigade consisted of about forty to seventy five men and two to five specially made boats and travelled at breakneck speed (for the time). Indians along the way were often paid in trade goods to help them portage around falls and unnavigable rapids. A 1839 report cites the travel time as three months and ten days—almost 26 miles (40 km) per day on average. These men carried supplies in and furs out by boat, horseback and as back packs for the forts and trading posts along the route. They also carried status reports for supplies needed, furs traded etc. from Dr. John McLoughlin head of the Oregon Country HBC operations, and the other fort managers along the route.
Fort Vancouver became the center of activity in the Pacific Northwest. Every year ships would come from London (via the Pacific) to drop off supplies and trade goods in exchange for the furs. It was the nexus for the fur trade on the Pacific Coast; its influence reached from the Rocky Mountains to the Hawaiian Islands, and from Russian Alaska into Mexican-controlled California. From Fort Vancouver, at its pinnacle, McLoughlin watched over 34 outposts, 24 ports, six ships, and 600 employees. Under McLoughlin's management, the Columbia Department remained highly profitable, in part due to the ongoing high demand for beaver hats in Europe.
McLoughlin's appearance, 6 foot 4 inches (193 cm) tall with long, prematurely white hair, brought him respect; but he was also generally known for his fair treatment of the people with whom he dealt, whether they were British subjects, U.S. citizens, or of indigenous origin. At the time, the wives of many Hudson's Bay field employees were indigenous, including McLoughlin's wife Marguerite; who was metis, the daughter of an aboriginal woman and a trader named Jean-Etienne Waddens. She was the widow of Alexander McKay, a trader killed in the Tonquin incident. See Jonathan Thorn. Her son Thomas McKay became McLoughlin's stepson.
When three Japanese fishermen, among them Otokichi, were shipwrecked on the Olympic Peninsula in 1834, McLoughlin, envisioning an opportunity to use them to open trade with Japan, sent the trio to London on the Eagle to try to convince the Crown of his plan. They reached London in 1835, probably the first Japanese to do so since the 16th century Christopher and Cosmas. The British Government finally did not show interest, and the castaways were sent to Macau so that they could be returned to Japan.
 Relations with American settlers
In 1821 the British Parliament imposed the laws of Upper Canada on British subjects in Columbia District, and gave the authority to enforce those laws to the Hudson's Bay Company. John McLoughlin, as chief factor of Fort Vancouver, applied the law to British subjects, kept peace with the natives and sought to maintain law and order over American settlers as well.
In 1841, with the arrival of the first wagon train via the Oregon Trail, McLoughlin disobeyed company orders and extended substantial aid to the American settlers. Relations between Britain and the United States had become very strained, and many expected war to break out any time. McLoughlin's aid probably prevented an armed attack on his outpost by the numerous American settlers. The settlers understood that his motives were not purely altruistic, and some resented the assistance, working against him for the rest of his life.
The Hudson Bay Company officially discouraged settlement because it interfered with the lucrative fur trade. The company belatedly realized that the increasing numbers of American settlers in the area would result in Columbia District becoming part of U.S. territory. In 1841, Hudson Bay Company Governor George Simpson ordered Alexander Ross to organize a party of Red River settlers to emigrate and occupy the land for Britain. When the James Sinclair expedition of almost 200 men women and children reached Fort Vancouver later that year, McLoughlin took his time settling them on Hudson's Bay farms and encouraged them to settle south of the Columbia River.
As tensions mounted in the Oregon boundary dispute; Simpson, realizing that border might ultimately be as far north as the 49th parallel, ordered McLoughlin to relocate their regional headquarters to Vancouver Island. McLoughlin instead ordered James Douglas to construct Fort Camosun (now Victoria, British Columbia, Canada). McLoughlin whose life was increasingly connected to the Willamette River Valley refused to move there.
McLoughlin was involved with the debate over the future of the Oregon Country. He advocated an independent nation that would be free of the United States during debates at the Oregon Lyceum in 1842 through his lawyer. This view won support at first and a resolution adopted, but was later moved away from in favor of a resolution by George Abernethy of the Methodist Mission to wait on forming an independent country.
In 1843 American settlers established their own government, called the Provisional Government of Oregon. A legislative committee drafted a code of laws known as the Organic Law. It included the creation of an executive committee of three, a judiciary, militia, land laws, and four counties. There was vagueness and confusion over the nature of the 1843 Organic Law, in particular whether it was a constitutional or statutory. In 1844 a new legislative committee decided to consider it statutory. The 1845 Organic Law made additional changes, including allowing the participation of British subjects in the government. Although the Oregon Treaty of 1846 settled the boundaries of US jurisdiction upon all lands south of the 49th parallel, the Provisional Government continued to function until 1849, when the first governor of Oregon Territory arrived.