The origins of MacBraynes lie in the formation of the shipping firm of David Hutcheson & Company in February 1851, which took over the West Highland shipping interests of Messrs. G & J Burns, the founding partners being David and Alexander Hutcheson along with David MacBrayne, a nephew of G & J Burns.

Following the retirement of the Hutcheson brothers, the company was run from 1879 by David MacBrayne in his own name. The fleet carried names which were, and still are household words in the West Highlands and Islands, "Iona", "Pioneer", "Mountaineer", "Chevalier ", "Clansman" and "Columba" being typical examples. In 1902 David MacBraynes 2 sons were admitted as partners, and from January 1906 the business was transferred to a private limited company. The following year, David MacBrayne died at the age of 93. By 1912 the fleet reached its maximum size of thirty six ships.
In 1906, the firm began operating their first bus service between Fort William and North Ballachulish. Expansion of bus services took place in 1911 with Inverness - Glenurquhart, in 1912 Fort William – Inverness and in 1913 Oban – Ardrishaig.

In 1928 the company was unable to finance the fleet replacements required for the renewal of the mail contract and there being no other shipping organisation prepared to undertake the services, there followed discussions in Parliament and eventually the company became jointly owned by Coast Lines Limited and the London, Midland and Scottish Railway. It became known as David MacBrayne (1928) Limited, the former title without the date was restored in 1934.
The first mail contract dates from 1855 and the title "The Royal Route" originated from the journey of Queen Victoria and Prince Albert from Loch Fyne via the Crinan Canal to Loch Linnhe in 1847. The Royal Route emblem can be seen today on the preserved vehicles, it was used throughout the history of the company in literature and timetables.

Following the formation of the Scottish Transport Group, MacBraynes bus services were integrated into STG subsidiaries and by 1972 the last green, cream and red buses ran on their old routes. From 1983 the MacBrayne ships were absorbed into the fleet of Caledonian MacBrayne Ferries and the blue pennant house flag bearing a red cross superimposed at the hoist over the Scottish Saltire, ceased to be used on the ships after more than 100 years.