Malcolm McRae was born on 20 November 1895, the son of James McRae and Sarah McLellan. He began employment at the Library, as Office Boy and Messenger, on 1 May 1910. His title was altered to Junior Clerk at the beginning of 1911. McRae enlisted on 1 February 1916 aged 20 years. A clerk at the Public Library, he embarked from Adelaide on board A19 Afric on 9 June 1916, with his colleague from the Library Cyril Harry Hannaford. He served in the 43rd Infantry Battalion as a signaller and was promoted several times during his service, eventually attaining the rank of sergeant. McRae served on the Western Front and was wounded in action in March 1918. He returned to Australia aboard the Nestor on 20 May 1919.
McRae resumed duty at the Library on 15 August 1919 and on March 1920 became Senior Clerk. In 1925 he acted in the position of General Secretary to the Board of Governors of the Public Library, Museum, and Art Gallery of South Australia.
McRae married Elsa Julie Judell on 28 September 1921 and they had a daughter, Janet Alison, in 1926. During the Second World War McRae was the secretary of the Fighting Forces Comforts Fund in South Australia, the South Australian division of the Australian Comforts Fund, a volunteer civilian society formed to organise clothing, cigarettes and reading matter for members of the armed forces. McRae was also secretary of the 43rd Battalion Club.