McCarthy was born in Salt Lake City, Utah, in 1945. He studied art at Weber State University in Ogden, Utah, and later continued to study at the University of Utah until 1969. He went on to study at the San Francisco Art Institute, receiving a BFA in painting. In 1972 he studied film, video, and art at the University of Southern California, receiving an MFA. From 1982 to 2002 he taught performance, video, installation, and performance art history at the University of California, Los Angeles. McCarthy currently works mainly in video and sculpture.
Originally formally trained as a painter, McCarthy's main interest lies in everyday activities and the mess created by them. Much of his work in the late 1960s, such as Mountain Bowling (1969) and Hold an Apple in Your Armpit (1970), are similar to the work of Happenings founder Allan Kaprow, with whom McCarthy had a professional relationship.
McCarthy's works include performance, sculpture, installation, film and "painting as action". His points of reference are rooted, on the one hand, in things typically American, such as Disneyland, B-Movies, Soap Operas and Comics – he is a critical analyst of the mass media and consumer-driven American society and its hypocrisy, double standards and repression. On the other hand, it is European avant-garde art that has had the most influence on his artistic form language. Such influences include the Lost Art Movement, Joseph Beuys, Sigmund Freud, Samuel Beckett, and the Viennese Actionism.

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