From the wreckage of the bands L.A. Guns and Hollywood Rose, Axl Rose and Izzy Stradlin joined Tracii Guns, Ole Beich and Rob Gardner to form Guns N' Roses. Initially formed to meet booked gigs for the disbanded acts, the new line-up was finalized on June 6, 1985. Duff became the band's bassist, replacing Ole Beich, and after two days of rehearsal the newly formed group played their debut gig as GN'R on a Thursday night at the Troubadour. As with ex-rhythm guitarist Izzy Stradlin, McKagan also had his crack at handling lead vocals on GN'R songs such as Use Your Illusion II's So Fine and a handful of songs off of the cover album The Spaghetti Incident?, including live favorite Attitude, originally by The Misfits.
He brought his punk rock influences to the group, being a huge fan of The Clash, Sex Pistols and Ramones.
He cited his favorite bassist is Paul Simonon.
He married for the first time On May 28, 1988 to Mandy Brix, a hostess in a Japanese restaurant in L.A. who also had her own all female rap-trio, "The Lame Flames." They were divorced in 1990. He married again in September 1992 to Linda Johnson, and divorced in September 1996.
Plagued by drug and alcohol addiction, McKagan survived for thirteen years in the highly volatile band before finally resigning in early 1998, due to Axl Rose's demand that he focus only on Guns N' Roses, and not any other projects, as well as the fact that "Axl was completely taking over". McKagan's departure left Rose as the sole member left from their classic line-up. He is also known for his alcohol induced acceptance at the 1990 American Music Awards. Upon receipt of GN'R's second award, McKagan and Slash stumbled to the stage appearing very drunk, holding drinks and smoking cigarettes. Within a span of 20 seconds, Slash managed to curse twice in his slurred speech before being interrupted by a music overdub and positioning of a camera on a curtain with the AMA logo. After the first f-word, an audible gasp was heard from the crowd, prompting Slash to cover his mouth and laughingly utter an "oops". Duff laughed along with him. Since then, many live shows are delayed a few seconds to prevent a similar incident. Adler and Stradlin departed the band in 1990 and 1991, respectively. Meanwhile in 1990 Duff and Slash co-wrote and played a few songs on Iggy Pop's "Brick by Brick."