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Bill Shankly was born in a small Ayrshire coal mining village, called Glenbuck, whose population in 1913, the year of Shankly's birth, was around 700. People born there would often move to find work in larger coal mines. As a result, Glenbuck became largely derelict and by the time Shankly's ghost writer John Roberts visited it in 1976, there were only 12 houses left, including a cottage owned by Shankly's sister, Elizabeth, whom Roberts described as "the last of the children of Glenbuck". Shankly's parents, John and Barbara, lived in one of the Auchenstilloch Cottages with their 10 children; five boys and five girls.

Shankly began his managerial career at the club where his professional playing career had started. Carlisle in the 1948-49 season were struggling in the bottom half of the Third Division North and finding it difficult to attract southern-based players because of the town's geographic remoteness in the far north of England. Shankly's work ethic transformed the team who finished 15th in 1948-49 after he had been in charge for only the last few matches. They improved to ninth in 1949-50 and then to third in 1950-51, almost gaining promotion. One of Shankly's players at Carlisle was Geoff Twentyman, then a promising young centre half, who was later transferred to Liverpool. After he retired from playing, Twentyman became chief scout at Liverpool, working with Shankly and finding several outstandingly talented players. Shankly used psychology to motivate his players, for example telling them that the opposition had had a very tiring journey and were not fit to play the match. He urged the local population to support the team and would use the public address system at matches to tell the crowd about his team changes and how his strategy was improving the team. Shankly recalled that Brunton Park was dilapidated, writing that "the main stand (was) falling to pieces and the terraces derelict". He even burned all the kit. When the team was travelling to Lincoln City, he saw a sportswear shop in Doncaster and stopped the coach to buy a full set of kit in which the team played at Lincoln. Season ticket sales in 1950-51 reached an all-time high and Carlisle challenged strongly for promotion as well as achieving a draw with Arsenal at Highbury in the FA Cup. But it ended badly because Shankly accused the club's board of reneging on a bonus promise for the players should the team finish in the top-three. Shankly resigned and took up an offer from Grimsby Town. Shankly's overall record in league football at Carlisle was 42 wins and 22 defeats from 95 matches.
Bill Shankly