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Douglas initially worked for ten years in a bank in accordance with the wishes of his father who was an amateur artist, before pursuing a career as an artist although he received no formal training. He was a member of the Edinburgh sketching and drinking group The Smashers Club (1848 - 1863) along with James Archer and the Faed brothers. He visited Italy in 1857 and returned there throughout his life. He became an avid antiquarian and many pieces from his private collection appear as accessories in his paintings. In 1877 he became only the third Curator of the National Gallery of Scotland, succeeding on the death of James Drummond RSA, and held this post until 1882 when, upon the death of Sir Daniel Macnee PPRSA, he became the sixth President of the Royal Scottish Academy. He held this office until his death on holiday at Newburgh in Fife. His Presidency was embroiled in controversy and he was regarded by some as a difficult character. He was knighted in 1882. Having begun to exhibit at the RSA Annual Exhibitions in 1845 he proceeded to exhibit until 1888, he became an Associate Member of the RSA in 1851 and an Academician in 1854.