Following the war in 1865, McDonald returned to the Virginia Military Institute where he was appointed a professor with the rank of Colonel instructing and serving as chair of the subjects of chemistry, geology, mineralogy, and metallurgy.
McDonald was appointed by the Board of Directors to replace Colonel Gilham as chair of the subjects of chemistry, mineralogy, and geology, who had in turn been appointed to replace George Washington Custis Lee the previous year.
Upon his return to the Virginia Military Institute, McDonald established the institution's first museum.
During the 1867–1868 academic year, McDonald's chair was further subdivided as new lecture halls were being completed within the restored barracks with McDonald retaining the subjects of mineralogy, geology, and metallurgy.
McDonald's colleagues among the faculty included Superintendent Francis Henney Smith and professors Matthew Fontaine Maury, Scott Shipp, John Mercer Brooke, and George Washington Custis Lee.
Toward the end of his tenure at the Virginia Military Institute, McDonald occupied the chair of geology and mining engineering.

In 1875, McDonald developed an interest in fish farming and became administrator of the Virginia state fish hatchery at Wytheville.
He was appointed as the sole Fish Commissioner of Virginia shortly thereafter.
It was during his tenure as the Fish Commissioner of Virginia that McDonald invented the fish ladder that was named for him.
In 1877, McDonald was commissioned by Virginia to conduct a survey of mineral resources within the James River basin, the findings of which he reported to the Virginia General Assembly in 1879.
McDonald continued to instruct at the Virginia Military Institute until 1879, when he was invited by his former professor Spencer Fullerton Baird to a position at the United States Commission of Fish and Fisheries.
McDonald accepted the position with the Fish Commission and submitted his resignation from the Virginia Fish Commission to Governor of Virginia, Fitzhugh Lee.
Following the war in 1865, McDonald returned to the Virginia Military Institute where he was appointed a professor with the rank of Colonel instructing and serving as chair of the subjects of chemistry, geology, mineralogy, and metallurgy. McDonald was appointed by the Board of Directors to replace Colonel Gilham as chair of the subjects of chemistry, mineralogy, and geology, who had in turn been appointed to replace George Washington Custis Lee the previous year. Upon his return to the Virginia Military Institute, McDonald established the institution's first museum. During the 1867–1868 academic year, McDonald's chair was further subdivided as new lecture halls were being completed within the restored barracks with McDonald retaining the subjects of mineralogy, geology, and metallurgy. McDonald's colleagues among the faculty included Superintendent Francis Henney Smith and professors Matthew Fontaine Maury, Scott Shipp, John Mercer Brooke, and George Washington Custis Lee. Toward the end of his tenure at the Virginia Military Institute, McDonald occupied the chair of geology and mining engineering. 
In 1875, McDonald developed an interest in fish farming and became administrator of the Virginia state fish hatchery at Wytheville. He was appointed as the sole Fish Commissioner of Virginia shortly thereafter. It was during his tenure as the Fish Commissioner of Virginia that McDonald invented the fish ladder that was named for him. In 1877, McDonald was commissioned by Virginia to conduct a survey of mineral resources within the James River basin, the findings of which he reported to the Virginia General Assembly in 1879. McDonald continued to instruct at the Virginia Military Institute until 1879, when he was invited by his former professor Spencer Fullerton Baird to a position at the United States Commission of Fish and Fisheries. McDonald accepted the position with the Fish Commission and submitted his resignation from the Virginia Fish Commission to Governor of Virginia, Fitzhugh Lee.
Marshall McDonald