Leonard James Callaghan was born in 1912, the son of a Chief Petty Officer in the Royal Navy. When Callaghan was nine, his father died of a heart attack, leaving the family without income and reliant on charity. He attended Portsmouth Northern Grammar School, leaving at the age of 17 to work as a tax inspector for the Inland Revenue in Maidstone. It was while working for the Inland Revenue that Callaghan first became involved with trade unions, becoming branch secretary of the Association of the Officers of Taxes. While in Maidstone he also met Audrey Moulton, whom he married in 1938.

As a Trade Union official, Callaghan was technically in a reserved occupation at the outbreak of the Second World War, but in 1942 he was permitted to enlist with the Royal Navy Volunteer Reserve as an Ordinary Seaman, serving at the Admiralty in Whitehall and in the East Indies Fleet. In April 1944 he was promoted to the rank of lieutenant. Callaghan returned to the United Kingdom to stand as a candidate in the 1945 general election, winning the seat of Cardiff South East and remaining the Member of Parliament for that constituency until his retirement in 1987. In 1947 he was appointed Parliamentary Secretary for the Ministry of Transport, then in 1950 he was moved to be Parliamentary and Financial Secretary to the Treasury, and in 1955 he became Parliamentary Advisor to the Police Federation. When Hugh Gaitskell died in 1963, Callaghan ran for the leadership of the Labour Party, coming third to George Brown and Harold Wilson.

Following Labour's victory in the 1964 general election Callaghan was appointed to the position of Chancellor of the Exchequer, taking on responsibility for stabilising sterling and the balance of payments, which was £800,000,000 in deficit. Callaghan was able to avoid devaluing the pound until 1967, and offered his resignation immediately afterwards. He was then appointed Home Secretary, a position he held until 1970, overseeing legislation including the Commonwealth Immigrants Act 1968 and the Race Relations Act.

While in Opposition following the 1970 general election, Callaghan served as Shadow Home Secretary, Shadow Secretary of State for Employment and Shadow Foreign Secretary, and opposed the efforts of Conservative Prime Minister Ted Heath to enter the European Economic Community. As Foreign Secretary in Wilson's second ministry he was able to renegotiate the terms of Britain's membership, and ultimately supported "Yes" in the 1975 United Kingdom European Communities membership referendum.

When Harold Wilson resigned in 1976, Callaghan once again ran to be elected as leader of the Labour Party, and this time was successful. On becoming Prime Minister, he became the only person to have held all four great offices of state – Chancellor of the Exchequer, Home Secretary, Foreign Secretary and Prime Minister. Following a by-election defeat in 1977, the Labour Party was running a minority government, and Callaghan was forced to make deals with smaller parties in order to avoid losing a motion of no confidence. A pact was negotiated with David Steel, leader of the Liberal Party, although this lasted only until September 1978.

Following a succession of strikes over the winter of 1978/1979, known as the Winter of Discontent, a motion of no confidence was tabled against the Callaghan government, which passed by one vote. The government was forced to call an election, which was one by the Conservatives, led by Margaret Thatcher. Callaghan remained leader of the Labour Party until 1980. He was made a Knight of the Garter and retired as a Member of Parliament in 1987. Shortly afterwards, he was elevated to the peerage, becoming Baron Callaghan of Cardiff. He died on 26 March 2005, just 11 days after his wife Audrey.