McDonald was selected fourth overall by the Toronto Maple Leafs in the 1973 NHL Amateur Draft. His professional career lasted from 1973 until 1989 during which time he played right wing for the Toronto Maple Leafs, Colorado Rockies, and Calgary Flames. McDonald served as captain for both the Flames and the Rockies. His time on the Rockies was spent as a struggle for success, but he later led the Flames to the Stanley Cup in 1989. It was his final season before retiring.

McDonald is regarded as a local hero in Calgary for bringing the cup to the Calgary Flames for the only time in the history of the organization.

Lanny McDonald was inducted into the Hockey Hall of Fame in 1992