The television actress pleaded guilty in October 2008 to a felony drug possession charge and agreed to enter drug treatment.
She had been arrested two months earlier by airport screeners who said they found a small amount of narcotics.
"Mackenzie deserves great credit for seizing the opportunity she was given to get clean and prove she was worthy of the dismissal of her case," her attorney Blair Berk said in a statement.
In a video posted on the celebrity website TMZ.com, Phillips is seen telling the judge the case changed her life.
Phillips had a history of drug abuse and was fired from the TV series "One Day at a Time" in 1982.
She claimed in a memoir last year that she had a decade-long sexual relationship with their father, pop star John Phillips of the Mamas and the Papas.