McArthur was born in Chicago into unusually privileged and progressive circumstances: Frank Lloyd Wright designed the family home in 1892, and the McArthurs were among the first people in the area to own an automobile.

After completing his architectural and engineering studies at Cornell in 1908, McArthur designed a number of lamps, one of which is still produced today. He settled in Phoenix, Arizona in 1911. There, along with his equally entrepreneurial brother Charles, he opened the first twelve car dealerships in the state. McArthur made good use of his professional training; he modified the standard automobile radiator to prevent it from overheating in the desert climate, and, in 1924, designed an early form of the recreational vehicle which he named the Wonderbus. He also found time to open the first radio station in Arizona, and to establish the Arizona Museum. But he seemed to find his true calling in 1930, when he began to design glamorous aluminum furniture using revolutionary dyeing and joining techniques.

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