McMillan was born in Derry, Ireland, he was the fourth child and third son of Rev. Gibson McMillan, a Methodist minister. William lived in Westport and Ballina, both in County Mayo, Ireland until the age of six. In 1856, his father was assigned to the Methodist church in Abbey Street, Dublin, and McMillan began his formal education. Along with his older brothers, John and Charles, he attended boarding school at Wesley College in St. Stephens Green. The following year, the family moved to Dún Laoghaire where his father was assigned to the Adelaide Road Methodist church, and McMillan continued attending Wesley. Due to family financial difficulties at the time, McMillan had to abandon any intention to attend university in Dublin; rather, in 1864 he began studies at Tulse Hill School in London. He left Tulse Hill in 1866 and entered the employment of his uncle, Alexander McArthur.
In 1887, McMillan was elected as the member for East Sydney in the New South Wales Legislative Assembly for the Free Trade Party, and held the seat until its abolition in 1894. He was Colonial Treasurer from March 1889 to July 1891 in Sir Henry Parkes fifth Free Trade Government, and was a delegate to the 1890 conference on the federation of Australia and the 1891 National Australasian Convention. In 1894 he was elected as the member for Burwood, a position he held until 1898. He chaired the finance committee of the 1897 Australasian Federal Convention.
Federal politics
In 1901, he was elected to federal parliament as the first member for the seat of Wentworth and was elected deputy leader of the Free Trade Party under George Reid. In August 1903, McMillan acted as Leader of Opposition following Reid's resignation from parliament and eventual re-election at the 1903 East Sydney by-election. He retired at the 1903 election to look after his business interests. Upon hearing of McMillan's retirement, Reid stated "I hope whatever the circumstances may be that have led him to come to the determination, that they will be only of a temporary nature, and that the public will not permanently lose the benefit of his great abilities and capacity for public affairs". His political opponent Alfred Deakin recalled him as a "thoughtful, educated businessman, narrow and cold after the manner of the Manchester School … business-like in manner and incisive in debate". McMillan stood unsuccessfully for the state seat of Willoughby in 1913.
Personal life
In 1878 McMillan married Ada Charlotte Graham, aged 16, and they had two daughters and two sons. McMillan was divorced in 1891. He married Helen Maria O'Reilly in 1892 and they had two daughters. He died in 1926 at his house Althorne in the Sydney suburb of Bellevue Hill. His children included:
Sister Elizabeth McMillan, founder of Tresillian Training Centre in Petersham was an authority on child welfare. She married Lieut. Dudley Percy Davidson, R.N. on 9 November 1929.
Constance McMillan married Ernest Owen, son of Colonel Percy Owen, on 20 September 1910.
Jocelyn McMillan married H. P. Gunnar on 24 March 1921. Gunnar was associated with the Medical School, Northwestern University, Chicago. Their son Rolf McMillan Gunnar was a noted cardiologist.