Douglas J. McFarlane, 72, a retired Navy Reserve captain who was an Interior Department official from 1963 to 1974, died Saturday at Bethesda Naval Hospital. He had cancer.

Capt. Farlane was a native of Delavan, Wis., and a 1931 graduate of the U.S. Naval Academy at Annapolis. During World War II, he held staff assignments and commanded a destroyer in the Pacific. He was recalled to active duty during the Korean conflict and again held staff posts and also served as commanding officer of an attack transport.

His decorations included the Bronze Star Medal. He retired from the Reserves in 1968.

He came to Washington in 1938. A licensed professional mechnaical and electrical engineer, he worked for the old Atomic Energy Commission, the Defense Department's Munitions Board, the Commerce Department, and the Federal Power Commission. He was assistant chief engineer of the Securities and Exchange Commission before moving to Tuscon, Ariz., in the 1950s.

After living in Arizona and in California, where he operated his own construction firm, he became assistant director of the Office of Saline Water in the Interior Department. He held this post until retiring in 1974.

He was a member of St. Andrew's Society, the Naval Reserve Association, and the Retired Officers Association. He was a resident of Herndon.

His marriage to the former Margaret Geise ended in divorce.

Survivors include his wife, the former Dorothy Bollinger, of Herndon; two daughters, and five stepdaughters.

The family suggests that expressions of sympathy be in the form of contributions to the National Capital Affiliate of the American Heart Association in Washington.