Born Margaret Nichol, MacLeod studied at the Ottawa School of Art with Franklin Brownell and at Montreal's École des Beaux-Arts, where she met her lifelong friend, the painter Marian Scott. In 1927 and 1928, encouraged by the anthropologist Marius Barbeau, she travelled to Western Canada to paint the landscape and people of the First Nations. In Toronto from 1934, she worked on window displays for the T. Eaton Co. under the designer René Cera. The following year she began to contribute illustrations and write for the Canadian Forum, becoming its arts editor for a brief period. After her marriage to Norman MacLeod, a native of Fredericton, she moved to New York City in 1937, where she painted the city's street life and numerous studies of her young daughter, Jane. Between 1940 and 1948 she visited Fredericton, where she taught summer art courses at the University of New Brunswick. During the Second World War, MacLeod was commissioned to paint the women's division of the Canadian armed forces.
MacLeod belonged to the Canadian Society of Painters in Water Colour and the Canadian Group of Painters. The influence of the Group of Seven is evident in her earliest landscapes. By 1933 she was beginning to paint in a more expressive style, and soon experimented with repetitive views, which she called "kaleidoscope vision.