Malcolm was the grandson of David I. Since his father Henry died before him, when David I died in 1153 Malcolm, only 12 years old at the time, took the throne. Unfortunately for his legacy, Malcolm had an effeminate appearance and became known as Malcolm the Maiden.

Malcolm's short reign was beset by constant revolts. Immediately after his accession to the throne, the men of Moray rebelled, led by Donald MacHeth, with the help of Somerled of Argyll. It took Malcolm three years to put down the revolt.

In 1157 the new English king, Henry II, met Malcolm at Chester. Malcolm was persuaded to cede all the territory gained by David I in exchange for being allowed to keep the earldom of Huntingdonshire. He even joined Henry in an expedition to Toulouse, where he was fighting when news reached him of a fresh revolt in Scotland. He came to terms with the rebels, only for another revolt to break out in Galloway.

He put down this revolt, too, only to face an invasion of Renfrewshire by Somerled. Somerled died under mysterious circumstances, so Malcolm was spared any further trouble. Malcolm himself died shortly after, in Jedburgh, and was succeeded by his brother William, known to history as William the Lion.