Royal Lochnagar is Diageo's smallest distillery, and due to its extremely charming and picturesque location, it was selected by the group as a 'Malts Brand Home' for VIP clients to visit and train. The banks of the River Dee have long been a hotbed of illegal distilling. After the Excise Act of 1823 was promulgated, some former illegal distillers obtained licenses, and their former colleagues sometimes turned against them. James Robertson from Crathie was one such case. The distillery he built north of the River Dee at Glen Feardan was burned down. In 1826 he built a second distillery on the north bank of the Dee, called Lochnagar, which was also burned down. So he built a third distillery, and the entire building was again 'reduced to ashes. The location and manner of the fire remain a mystery to this day' (Aberdeen Journal, May 12, 1841). Therefore, in 1845, the person who dared to build a new Lochnagar distillery on the other side of the Dee near Balmoral Castle was a truly courageous man. This brave man was John Begg. His name was later spread by its blended whisky brand slogan, 'Have a John Begg'. In 1848, Queen Victoria and Prince Albert rented Balmoral Castle, and later bought and rebuilt it. Two days after the royal family first arrived at Balmoral, Begg learned that Prince Albert was interested in 'mechanical toys', so he invited them to the distillery to taste his 'work'. The next day, the Prince, accompanied by the Queen and their three eldest children, visited the distillery, and Begg poured them each a glass of whisky. That glass of whisky must have been very good, because a few days later the distillery received a Royal Warrant. Not long after, the distillery was renamed 'Royal Lochnagar'. The distillery was later passed on to John Begg's son and grandson, then to a family trust, and after 1902 became a private limited company. During World War I, the directors negotiated with D.C.L., which acquired the family's shares in 1916.

Royal Lochnagar's name originates from the nearby mountain and the loch near its summit. It was said to be the favorite whisky of Sir MacFarlan of Bellsdown. As President of United Distillers, Sir Norman MacFarlan pioneered the first proprietary single malt whisky bottlings, a revolutionary move that transformed how distilleries market their precious malts to the world.