The XMM Cluster Survey (XCS) is a serendipitous search for galaxy clusters using all publicly available data in the XMM-Newton Science Archive. Its main aims are to measure cosmological parameters and trace the evolution of X-ray scaling relations. In this paper we describe the data processing methodology applied to the 5776XMM observations used to construct the current XCS source catalogue. A total of 3675 > 4σ cluster candidates with >50 background-subtracted X-ray counts are extracted from a total non-overlapping area suitable for cluster searching of 410deg². Of these, 993 candidates are detected with >300 background-subtracted X-ray photon counts, and we demonstrate that robust temperature measurements can be obtained down to this count limit. We describe in detail the automated pipelines used to perform the spectral and surface brightness fitting for these candidates, as well as to estimate redshifts from the X-ray data alone. A total of 587 (122) X-ray temperatures to a typical accuracy of