McFarland attended Brooklyn College where he earned his B.A. in 1975. He also attended Goddard College and Stanford University. McFarland taught at both these institutions later in his life. At Stanford, McFarland worked as teacher of creative writing from 1981 to 1986. McFarland married Michelle Simons and fathered two children. He currently resides in Watertown, Maine and San Francisco, California.

McFarland's first novel, The Music Room, was published in 1990 and was met with a great deal of critical praise. The New York Times praised the novel as being genuine and emotional. The Music Room quickly became a New York Times bestseller. McFarland told the Washington Post that his early success was due to "a lot of good luck".

McFarland's second novel, School for the Blind, was also met with praise. This novel chronicles several elderly characters as they look into their troubled pasts. Some critics were surprised at the stark contrast between McFarland's first and second novels. As Sven Birkerts, a literary critic for the New York Times, said that School for the Blind was "...in tone and intensity and final effect, as unlike its predecessor as it is possible to be."

McFarland's third and fourth novels, A Face at the Window and Singing Boy, were also met with praise from critics and dealt with McFarland's familiar themes of alcoholism and death.