McDonald met his wife Ardell while playing junior hockey for the Medicine Hat Tigers.
They were married in 1975, and have four children: daughters Andra and Leah, and sons Barrett and Graham.
The family settled in Calgary after McDonald's trade to the Flames.
They also maintain a summer home in Montana, where the family has invested in restaurants and a craft brewery in the community of Lakeside.
Co-owned by Andra, the brewery considers McDonald its inspiration, and produces "Old 'Stache Porter" in his honour.

His giant, walrus-style moustache is McDonald's most defining physical characteristic and helped him become an iconic figure in the sport.
He developed it in 1974, spending the summer seeing what kind of beard he could grow.
Knowing that the Maple Leafs did not allow players to maintain beards at the time, he settled on what he described as a "normal moustache" once he returned to Toronto.
Some time later, he was inspired by baseball player Sparky Lyle's moustache and chose to grow one in a similar style.
It became a symbol for the Flames as some fans took to wearing fake red moustaches during playoff runs.
Razor manufacturers offered endorsements if he would shave it, which he refused.

Among his charitable and humanitarian efforts, McDonald is best known for his participation with the Special Olympics.
He first became involved with the organization in 1974 when the Maple Leafs asked him to represent the team at the Special Olympics Summer Games.
The event began a decades long association for McDonald.
He was the honorary coach of the 1986 Special Olympics Summer Games in Calgary, and served as a head coach for the Canadian Special Olympics floor hockey team.
In 1988, McDonald's contributions to the Special Olympics as a coach and co-chairman of the organization's fundraising efforts, as well as his work with the Alberta Children's Miracle Network Hospitals, were recognized by the NHL as he was named the inaugural recipient of the King Clancy Memorial Trophy.
The award is given to the hockey player who best exemplifies leadership on the ice with humanitarian contributions off of it.
McDonald was previously honoured by the Flames as the first winner of the Ralph T. Scurfield Humanitarian Award in 1987, which he won again in 1989.

McDonald's autobiography, Lanny, co-written by Steve Simmons, was published in 1987.
A Canadian best-seller, it was an unexpected success for publisher McGraw-Hill.
The book sold 10,000 copies in its first couple months of publication, for which the publisher made a donation of $10,000 to the Special Olympics.
In 2008, McDonald was given an honorary doctorate from the University of Calgary.
McDonald met his wife Ardell while playing junior hockey for the Medicine Hat Tigers. They were married in 1975, and have four children: daughters Andra and Leah, and sons Barrett and Graham. The family settled in Calgary after McDonald's trade to the Flames. They also maintain a summer home in Montana, where the family has invested in restaurants and a craft brewery in the community of Lakeside. Co-owned by Andra, the brewery considers McDonald its inspiration, and produces "Old 'Stache Porter" in his honour.
His giant, walrus-style moustache is McDonald's most defining physical characteristic and helped him become an iconic figure in the sport. He developed it in 1974, spending the summer seeing what kind of beard he could grow. Knowing that the Maple Leafs did not allow players to maintain beards at the time, he settled on what he described as a "normal moustache" once he returned to Toronto. Some time later, he was inspired by baseball player Sparky Lyle's moustache and chose to grow one in a similar style. It became a symbol for the Flames as some fans took to wearing fake red moustaches during playoff runs. Razor manufacturers offered endorsements if he would shave it, which he refused.
Among his charitable and humanitarian efforts, McDonald is best known for his participation with the Special Olympics. He first became involved with the organization in 1974 when the Maple Leafs asked him to represent the team at the Special Olympics Summer Games. The event began a decades long association for McDonald. He was the honorary coach of the 1986 Special Olympics Summer Games in Calgary, and served as a head coach for the Canadian Special Olympics floor hockey team. In 1988, McDonald's contributions to the Special Olympics as a coach and co-chairman of the organization's fundraising efforts, as well as his work with the Alberta Children's Miracle Network Hospitals, were recognized by the NHL as he was named the inaugural recipient of the King Clancy Memorial Trophy. The award is given to the hockey player who best exemplifies leadership on the ice with humanitarian contributions off of it. McDonald was previously honoured by the Flames as the first winner of the Ralph T. Scurfield Humanitarian Award in 1987, which he won again in 1989.
McDonald's autobiography, Lanny, co-written by Steve Simmons, was published in 1987. A Canadian best-seller, it was an unexpected success for publisher McGraw-Hill. The book sold 10,000 copies in its first couple months of publication, for which the publisher made a donation of $10,000 to the Special Olympics. In 2008, McDonald was given an honorary doctorate from the University of Calgary.
Lanny McDonald