Trained as an apprentice blacksmith at Drumlanrig Castle, seat of the Dukes of Buccleuch, Macmillan saw a hobbyhorse being ridden by the rider pushing his feet on the ground, and realised what a radical improvement it would be if he could work it without having to do that. Thus the first bicycle with pedals was propelled by a horizontal reciprocating movement of the rider's feet transmitted to cranks on the rear wheel by connecting rods.

A model of his velocipede at the Joseph Thomson Local Heritage Centre at Penpont shows that it was a pedal-driven bicycle made of wood, with horn-rimmed wooden wheels, a steerable wheel in the front and a rear wheel connected to pedals via connecting rods. It weighed 26 kg and was quite different from hobbyhorses with wooden wheels shod with iron tyres, and the frame consisted of a curved wooden backbone, forked to accommodate the rear driving wheel and carry the axle-bearings near its end.

The steering wheel was carried on an iron fork, whose pivot passed through the frame and had the handlebar attached to it. The rear axle had cranks keyed to its ends, and these were driven by connecting rods from intermediate points in two swinging levers, pivoted near the steering head and carrying wooden treadles at their lower ends.

Before long, Macmillan was to be seen regularly riding his creation the 22.5 km between his home and Dumfries. He became known locally as Daft Pate, a crazy inventor, but his fame spread and when he rode the 109 km to visit his two schoolteacher brothers in Glasgow in June 1842 he was accompanied by an immense multitude. To escape the crowd he rode his invention onto the pavement and knocked down a child for which offence he was arrested, charged and fined five shillings at the Gorbals Police Court on 9 June 1842. Telling him that this modern craving for speed was to be deplored, the magistrate however asked him to perform a figure of eight demonstration in the courtyard outside.

Staying in Glasgow, Macmillan found employment at the city's Vulcan Foundry, eventually returning home to help his aging father. The original machine passed into the ownership of a nephew in Thornhill who, not realising its significance, broke it up. As Macmillan did not patent his invention, it was inevitably produced by other people, but what does seem fairly clear is that he invented the first bicycle with pedals. Gavin Delzell from Lesmahagow was a wheelwright who copied the design and passed it on to so many people that he was generally regarded as the inventor but in 1892 James Johnston a member of the Glasgow Tricycling Club received a letter from Delzell's son admitting that Johnston had proved Macmillan had invented the bicycle before his father.

Macmillan’s grave is in the nearby kirkyard. The house is today a private residence but has two commemorative red sandstone plaques, the second supplied by the National Committee on Cycling in 1939 to mark the centenary of the bicycle, and an interpretive panel. Replicas of his machine are in the Dumfries Museum and Camera Obscura, the Loreburn Centre in Dumfries, Drumlanrig Castle, the Riverside Museum in Glasgow and the Science Museum in London. The replica bicycle at Dumfries Museum was shown in the National Exhibition at Crystal Palace in 1896.