He was born in Perthshire and died in Edinburgh. He graduated at St. Andrews, and after being licensed became assistant to the parish minister of Errol in Perthshire. Owing to differences with the minister, he left in 1763 and was appointed assistant to Antony Dow of Fettercairn, Kincardine. In 1772 he was rejected as successor to Dow, and was even refused by the presbytery the testimonials required in order to obtain another living. The refusal of the presbytery was sustained by the General Assembly, and Barclay then left the Scottish church and founded congregations at Sauchiyburn, Edinburgh and London. His followers were called Barclayans, Barclayites or Bereans, the latter because they regulated their conduct by study of the Scriptures after the biblical Bereans of Acts xvii. 11. They held to a modified form of Calvinism. The Berean Church had congregations in Scotland, London and Bristol, but mainly merged with the Congregationalists after Barclay's death.
His works, which included many hymns and paraphrases of the psalms, and a book called Without Faith, without God, were edited by J. Thomson and D. Macmillan, with a memoir (1852).