Peter F. McNally was born in Tillsonburg, Ontario and educated at St. Mary's Separate School and the Tillsonburg District High School. He then attended the University of Western Ontario where he graduated with a B.A. degree in 1964. He attained a Bachelor of Library Science degree in 1965, a Master of Library Science in 1966 and a Master of Arts in history in 1977.

In 1966 he began his career as a librarian at McGill University in the Reference Department of Redpath Library. In 1970 he became the Lande Librarian and in 1971 began teaching in the School of Information Studies as a faculty lecturer. Appointed as an assistant professor in 1972, he became an associate professor in 1982 and a full professor in 1999. He taught courses in reference services, bibliography, government publications as well as the history of printing, libraries and archives. His publications, chiefly in the areas of library and McGill history, and bibliography, have included two editions of Readings in Canadian Library History, McGill Milestones, 1744-2007 and articles in History of the Book in Canada, v. II, 1849-1918.

McNally has also served as the president of the Bibliographical Society of Canada as well as holding other executive posts within the organization. Extensively involved in the activities of the McGill academic community, he was a founding member of the Association of McGill University Librarians, the President of the James McGill Society, and the McGill Faculty Club. A long time coordinating committee member of the Canadian Studies Programme, he was also president of McGill's Newman Association chaplaincy service. A recognized expert on the monarchy he has given many interviews on this topic to the print and television media. In 2003 he was named as the Director of the History of McGill Project.