In 1770 he went to New York City, entering the countinghouse of a merchant uncle; he returned to Scotland with a considerable fortune in 1783. There he purchased an estate at Sauhrie, Ayrshire. McAdam, who had become a road trustee in his district, noted that the local highways were in poor condition. At his own expense he undertook a series of experiments in road making.

In 1798 he moved to Falmouth, Cornwall, where he continued his experiments under a government appointment. He recommended that roads should be raised above the adjacent ground for good drainage and covered, first with large rocks, and then with smaller stones, the whole mass to be bound with fine gravel or slag. In 1815, having been appointed surveyor general of the Bristol roads, he put his theories into practice. To document his work, McAdam wrote Remarks on the Present System of Road-Making (1816) and Practical Essay on the Scientific Repair and Preservation of Roads (1819).

As the result of a parliamentary inquiry in 1823 into the whole question of road making, his views were adopted by the public authorities, and in 1827 he was appointed Surveyor General of Metropolitan Roads in Great Britain. Macadamization of roads did much to facilitate travel and communication. The process was quickly adopted in other countries, notably the United States.