McKinley hoped to persuade Spain to grant independence to rebellious Cuba without conflict, but when negotiation failed he led the nation into the Spanish-American War. Hostilities began in 1898 following the mysterious sinking of the USS Maine in Havana Harbor. Madrid sued for peace after two Spanish squadrons were sunk in the battles of Santiago de Cuba and Manila Bay, and a third, more modern, fleet was recalled home to protect the Spanish coasts. The ten-week war ended Spanish colonial rule in the Americas and resulted in the U.S. acquisition of territories in the western Pacific and Latin America.

McKinley had a yellow-headed amazon parrot named Washington Post that could whistle "Yankee Doodle Dandy". McKinley thought Washington Post so clever that he appointed him official White House greeter. The parrot took his position quite seriously and did his best to make everyone feel welcome, especially women. Whenever a woman would walk by his cage, Washington Post would pipe up: "Look at all the pretty girls!"

Garret Hobart, formerly an influential New Jersey politician and political operative, served as the 24th vice president of the United States, from 1897 until his death in 1899. He was the sixth American vice president to die in office.

McKinley defeated William Jennings Bryan again in the 1900 presidential election in a campaign focused on imperialism, protectionism and free silver. As in 1896, Bryan embarked on a speaking tour around the country while McKinley stayed at home, this time making only one speech, to accept his nomination. Nevertheless, he won the largest victory for any Republican since 1872, even winning Bryan's home state of Nebraska.

McKinley needed a new running mate after Hobart's death. He considered several candidates, including Elihu Root, William B. Allison and Cornelius N. Bliss, but none were as popular as the Republican party's rising star, Theodore Roosevelt.

He vetoed a total of 42 bills (6 regular vetoes and 36 pocket vetoes), none of which were overridden by Congress.

McKinley was assassinated on September 6, 1901, during a visit to the Pan-American Exposition in Buffalo, New York. He was shaking hands with the public when anarchist Leon Czolgosz shot him twice in the abdomen. He was the third American president to be assassinated, following Abraham Lincoln in 1865 and James A. Garfield in 1881.

On the evening of September 13, 1901, McKinley's condition deteriorated. After saying farewell to his wife and murmuring a passage from the hymn "Nearer, My God, to Thee", he uttered his last words, which the physician in attendance jotted down: "Goodbye, all. Goodbye. It is God's way. His will be done." He then fell into a coma. At a quarter after two on the morning of September 14th, he died from his wounds, specifically blood poisoning brought on by gangrene of the pancreas.

The Treasury minted several versions of the $500 bill, featuring a portrait of President William McKinley. The last $500 bill rolled off the presses in 1945, and it was formally discontinued 24 years later in 1969.

McKinley never set foot in Alaska and never saw the highest mountain peak in North America, which was named Mount McKinley in his honor by prospector William Dickey, a designation that was made official by President Woodrow Wilson in 1917. However, the Koyukon people who inhabit the area around the mountain had previously referred to the peak as "Denali" for centuries, and in 2015 the United States Department of the Interior officially changed the name of the mountain back to Denali.