Dominic McCarthy was born in York, Western Australia, in August 1892. Having been orphaned at a young age, McCarthy listed no next of kin on his attestation papers when he joined the Australian Imperial Force in October 1914. He was brought up in Clontarf Orphanage in Perth and educated in Catholic schools.

Private McCarthy was posted to the 16th Battalion where his large build earned him the nickname "Fats". The battalion landed at Gallipoli on 26 April 1915 and McCarthy remained on the peninsula until illness forced his evacuation in September. By then he had been promoted to sergeant. He returned to duty in November and was among the last in his battalion to leave Gallipoli on 20 December.

By June 1916 the 16th Battalion were in France where they took part in the fighting at Pozières and Mouquet Farm in August. McCarthy was promoted to company sergeant major in March 1917 and the following month was commissioned as a second lieutenant. The day after receiving his commission, McCarthy was wounded at Bullecourt and evacuated to England where he spent three months in hospital and convalescing. In November he was promoted to lieutenant and was awarded the French Croix de Guerre. He spent the months between February and August 1918 training troops in England, before rejoining his battalion in time for the offensive that began on 8 August.

Just over two weeks later, on 23 August, McCarthy performed what some regarded as the most effective piece of individual fighting in the history of the AIF next to Albert Jacka's Military Cross winning feat at Pozières. McCarthy, leading the 16th Battalion's "D" Company, attained his objectives, but the battalion on their left had been held up by German machine guns. He and a sergeant attacked the machine-gun posts, capturing 460 metres of German trench and forcing the surrender of between forty and fifty Germans. McCarthy was unscathed, the sergeant wounded. For this McCarthy was awarded the Victoria Cross that, within his battalion and in some quarters of the London press, came to be known as the "super-VC".

Ten days after the war ended, on 21 November 1918, McCarthy was evacuated to England with influenza. He returned to Australia in December 1919, having married Florence Norville the previous January. Their only son, Lawrence, was killed in action on Bougainville in 1945. McCarthy was demobilised in August 1920. He returned to Western Australia but moved to Victoria in 1926. He gained employment with the Sunshine Harvester Works remaining with them until 1934 when the company was forced to lay off staff during the depression. He found new work the following year with the Trustees, Executors & Agency Co., and remained with that company until his retirement in 1969.

McCarthy died at Heidleberg Repatriation Hospital in Melbourne in May 1975 and was cremated with full military honours.