Craig's short architectural career was focused almost entirely in Edinburgh, he is best known for his winning plan for the first Edinburgh New Town.

He won the competition held in 1766 with his plan for a simple rectilinear arrangement of three parallel main streets (Princes Street, George Street and Queen Street) with a square at each end (St Andrew's Square and George Square representing the patron saints of Scotland and England.

He presented his plan to King George III in 1767.

To avoid confusion with the existing George Square further south, George Square was re-named 'Charlotte Square' after George III's wife. Princes Street, originally called St. Gile's Street but was renamed was named after George's sons. Frederick Street was named after the King's father and Hanover Street because King George III belonged to the Hanoverian Royal Family. Castle Street because of it's views of Edinburgh Castle and St. David Street after the patron saint of Wales. Thistle Street and Rose Street are named after the National emblems of Scotland & England.

The design of the New Town was a patriotic affair, to celebrate the union of the crowns and the United Kingdom. One design was submitted with the streets laid out in shape of a Union Jack although it was rejected in favour of the current, more practical layout.

Craig's other works included the Physicians' Hall in Queen Street, later re-modelled by William Playfair in the Palladian manner (for the Royal College of Physicians of Edinburgh) and Observatory House at the City Observatory on Calton Hill.