Nathanael Chalmers was born at Rothesay on the Isle of Bute, Scotland, on 22 August 1830. He was the youngest of 12 children and the seventh son of Elizabeth Margaret Pungel, daughter of the Dutch governor of Malacca, and her husband, William Chalmers, a surgeon in the East India Company's employment.
Shortly after Nathanael's birth the family moved to Croydon, in Surrey, England. In 1837, as a result of his father's impoverished condition and ill health, Nathanael enrolled at Christ's Hospital, where he was educated as a 'Blue Coat boy' until the age of 15. He spent a year in a Liverpool shipbroker's office and in 1847 joined the Royal Bank of Australia in London as a clerk, from which position he emigrated to Otago, New Zealand, aboard the Ajax in 1849 in company with his older brother Gerit Alexander Chalmers.
On arrival, the brothers took up two 50 acre blocks at Omaru Bush and Moa Hill, near Kaihiku, ignoring Captain William Cargill's wish for them to settle on their suburban block in Dunedin. In 1852 the brothers unsuccessfully tried their hand at goldmining at Forest Creek in Victoria. In 1853 Nathanael returned by the schooner Otago from Sydney and landed with the first sheep brought into Southland at New River (Oreti River), near where Invercargill now stands. In company with Alexander McDonald, also known as Sinclair, and a party of four others, he assisted in driving a mob of cattle overland to Dunedin; after considerable privations he eventually made his way back to his land at Omaru.
On his overland trip Chalmers met Reko from Tuturau, near the present town of Mataura, who agreed to guide Chalmers inland to the north in return for a three-legged pot. In September 1853, having still not completely recovered from his earlier trip, Chalmers, in company with Reko and another Maori, travelled north from Tuturau. On this ambitious journey he became the first European to set eyes on Lakes Wakatipu, Wanaka and Hawea, and the valleys of the upper Clutha River. The vegetation tore his clothes to shreds and his boots had to be replaced by sandals fashioned from flax. Troubled again by the dysentery which had dogged his earlier journey with McDonald, Chalmers became exhausted and his guides were forced to construct a flax raft and make a rapid and terrifying trip through the Cromwell Gorge and down the Clutha to get him to his friends again.
In November 1853 Chalmers joined Alfred Fuller in a grazing venture at Popotunoa. For a short time thereafter he resided at Wairuna; he married Ellen Mary McGrath of St Heliers, Jersey, at Mataura, on 13 November 1856. There were five daughters and three sons of this marriage. Later he joined his brother G. A. Chalmers on his run at Otakaramu, on the Mataura, before purchasing in 1858 the Hokanui run, near Gore, from Alexander MacNab, and renaming it Croydon, a name which the district retains today. In 1861 he obtained a judgement against James Macandrew, the superintendent of Otago, for a debt over sheep dealings, and had him imprisoned for failure to pay. Chalmers's financial reverse almost certainly precipitated the sale of Croydon, and his removal to Invercargill in the same year. Later that year he was elected to the first Southland Provincial Council as member for Invercargill. On becoming the first provincial treasurer and a member of the executive, he resigned his seat and was elected unopposed for the new seat of Mataura, which he held until 1864.
As treasurer he was a prime mover in the drive to get better communications for the province, overseeing the raising of the funds necessary for the development of wharves, roads, the electric telegraph, and railways from Bluff to Invercargill and onward to Winton. He also took the first census for Wallace District. His time in the provincial council was occasionally tumultuous, and he had to repulse attempts to oust him on the grounds that his election as member for Mataura was invalid. He became known as a sarcastic debater. During the absence of James Menzies, the superintendent, in 1863–64, Chalmers acted as deputy superintendent and turned the first sod for the Great Northern Line. This venture initially failed, owing to the use of rails of local wood, sanctioned by Chalmers as an emergency measure in an attempt to complete work before the onset of winter. Resigning in 1864 because of ill health, and in financial difficulties, Chalmers worked for his brothers G. A. and Dr C. B. Chalmers on their large run at Moa Flat until problems with scab and low prices led to the run passing to its principal creditor, William 'Big' Clarke, in 1868.
In November 1868 Chalmers sailed for Fiji, where he became a cotton planter on the Rewa River and later at Koro Island. Labour shortages prompted him to make unsuccessful approaches to the government of India in 1870 in an attempt to recruit labour. In 1872, under the Cakobau government, he became secretary to the governor and deputy warden of Central Province. Later he was appointed first commissioner for Central Province, as well as comptroller general of labour, sheriff, chief of police and governor of the gaol. He resigned all these positions when salaries were reduced, shortly before the cession of Fiji to Britain in 1874.
He was appointed a member of the Legislative Council of Fiji from 1879 to 1883. In 1881, as manager under the largely absentee owner, his older brother Dr C. B. Chalmers, he opened the Penang sugar mill on the north coast of Viti Levu. The capital for the mill venture came from an out-of-court settlement with the Clarke estate over the loss of Moa Flat station in Otago. It was the first mill on the 'dry' side of the island and is now the oldest mill in Fiji. In the mid 1880s, when falling sugar prices caused considerable losses and indebtedness, he became notorious for his severe treatment of the labour force. Left penniless when creditors took the mill in 1889, he was appointed a magistrate in 1892, a position he occupied until retirement in January 1906 at the age of 75. His magistracy was marked by his great energy and at times by the severity of his sentencing, so that he was often at odds with his superiors. After his retirement he spent his last four years in somewhat straitened circumstances in Suva, where he died on 2 December 1910.