MacDonald, who was plumped for by New Zealand coach Graham Henry on Wednesday as the number 10 replacement for second Test hero Daniel Carter (shoulder), has withdrawn with a groin injury.
The noted full-back suffered the knock in training earlier this week and North Harbour's McAlister, who lined out at centre in the "Baby Blacks'" Under-21 World Cup final defeat of Ireland last year, has been called-up to start.
The youngster, who turns 22 next month and whose father Charlie played rugby league in England between 1988-96, was born in Taranaki and was unfortunate not to make his senior debut for New Zealand on their Northern Hemisphere tour last autumn, owing to hamstring trouble.
McAlister's father Charlie ironically rubbed shoulders with Lions coaches Mike Ford and Phil Larder when he played for a time for Oldham.
McAlister junior did play for the New Zealand Maori against Fiji last month, and also played his part - kicking two penalties and a conversion - in the Maori's 19-13 defeat of the Lions in Hamilton almost four weeks ago.
With MacDonald and Carter out, Otago's Nick Evans comes onto the replacements bench.
Thursday saw openside flanker Richie McCaw also forced out with a hamstring injury.
Regular number 8 Rodney So'oialo shifts to cover openside with Sione Lauaki packing down at the base of the NZ scrum.
Junior All Black Marty Holah has been called in as cover.
NEW ZEALAND: Mils Muliaina; Rico Gear, Conrad Smith, Tana Umaga (Captain), Sitiveni Sivivatu; Luke McAlister, Byron Kelleher; Tony Woodcock, Keven Mealamu, Greg Somerville, Chris Jack, Ali Williams, Jerry Collins, Rodney So'oialo, Sione Lauaki.
Replacements: Derren Witcombe, Campbell Johnstone, James Ryan, Marty Holah, Justin Marshall, Nick Evans, Doug Howlett.