The American singer/songwriter was left bald and exhausted after a stem-cell transplant from his sister but the procedure was worth it after doctors gave him a clean bill of health.
McMahon was diagnosed with acute lymphatic leukaemia in May(05) after reporting bouts of fatigue to doctors in California.
The rocker tells MTV News, "I have a doctor's appointment every week and they check my blood counts. Everything has been good, and then in another 50 days or so they'll test my bone marrow.
"I was already in remission (from two rounds of chemotherapy) once I went in to get the transplant... and the idea is that you send in the new good cells that will ultimately pick up where the old ones left off."
McMahon is celebrating the news that he's on his way to recovery by recording a Christmas tune.
He says, "It seems like every year I always have different people come and ask for a Christmas song and it seemed strangely appropriate for me this year because Christmas is the time that I am supposed to be sort of back and up and running and whatnot.
"So I just wrote a song about returning from this very interesting journey and kind of getting back to normal and getting back to work and my regular life."