McLane was born in Smyrna, Delaware in 1786. He attended private schools and served as a midshipman on the USS Philadelphia for one year before he was 18. At 18, he attended Newark College (later the University of Delaware) and studied law, passing the bar in 1807 and beginning a practice in Smyrna, Delaware. He married Catherine Mary Milligan in 1812, and had 13 children with her. One of his sons, Robert Milligan McLane, became a notable American ambassador and Governor of Maryland.

After serving in the War of 1812, McLane served five terms as the lone representative from Delaware in the House of Representatives (1817-1827). He won a further sixth term, but resigned from the House before he could begin serving his term after being elected Senator from Delaware by the Delaware Legislature, and served as senator from March 4, 1827 until April 29, 1829. Among his duties was service as the chairmen of the Ways and Means Committee.

He resigned from the Senate in 1829 to serve as minister plenopotentiary to England under Andrew Jackson. McLane was instructed to inform the English that his appointment signaled a break from the John Quincy Adams administration, and that issues of dispute under the Adams Administration would no longer be issues in a Jackson administration. His main mission was to open up trade between the United States and the British West Indies.

In 1831, McLane served as Secretary of the Treasury under Andrew Jackson from August 8, 1831 to May 28, 1833. He was appointed during a purge of supporters of Senator John Calhoun from the Cabinet by Jackson. When McLane opposed the removal of Federal deposits from the Bank of the United States and their redeposit in state banks (McLane felt the state banks were unsafe), Jackson removed him from the office of Treasury and gave him a recess appointment as Secretary of State, replacing McLane with William J. Duane. (Unfortunately for Jackson, Duane was also opposed.)

McLane served as Secretary of State from May 29, 1833 until June 30, 1834. During McLane's tenure in the State Department, an issue arose regarding France's failure to comply with an 1832 treaty regarding payment of United States Claims against France. President Jackson threatened to take a hard line with France, stating that he might seek congressional authorization for letters of marque against France. McLane resigned as Secretary of State in protest. Vice President Martin Van Buren was then able to move a long time ally of his, Senator John Forsyth, into position as Secretary of State.

As Secretary of State, McLane managed the first major reorganization of the Department of State, establishing seven new bureaus. His organization was basically retained until Ulysses S. Grant's Secretary of State, Hamilton Fish, reorganized in response to a reduction in the number of State Department staff.

McLane then moved to Baltimore, Maryland and served as president of the Baltimore and Ohio Railroad Company from 1837 to 1847, also serving again as Minister to England from 1845 to 1846, where he participated in negotiations to establish the Oregon boundary.

McLane died in Baltimore, Maryland in 1857 and was buried in Greenmount Cemetery.