Owing to poverty, Callaghan entered the civil service at age 17 as a tax officer. By 1936 he had become a full-time trade-union official. After serving as a lieutenant in naval intelligence during World War II, he entered Parliament in 1945, representing the Welsh constituency of Cardiff South.
Between 1947 and 1951 Callaghan held junior posts at the Ministry of Transport and at the Admiralty. When Harold Wilson's Labour government was formed in 1964, Callaghan was named chancellor of the Exchequer. In this capacity he helped secure in 1966-67 international agreement to a system called Special Drawing Rights, which in effect created a new kind of international money. He resigned from the Exchequer in 1967, when he was forced to devalue the pound sterling. He then served as home secretary until 1970. In Wilson's second government in 1974, Callaghan was named foreign secretary; and in 1976, upon Wilson's resignation, Callaghan succeeded him as prime minister, largely because the Parliamentary Labour Party considered him the least divisive candidate.
Throughout his ministry (1976-79), Callaghan, a moderate within the Labour Party, tried to stem the increasingly vociferous demands of Britain's trade unions. He also had to secure the passage of unpopular cuts in government spending early in his ministry. His reassuring public manner came to be criticized as complacency when a series of labour strikes in 1978-79 paralyzed hospital care, refuse collection, and other essential services. In March 1979 his government was brought down by a vote of no confidence passed in the House of Commons, the first such occurrence since 1924. At the subsequent general election, Callaghan's party was defeated. On Oct. 15, 1980, he resigned as leader of the Labour Party, to be succeeded by Michael Foot.
Callaghan's political papers are held jointly between the Archives Division of the London School of Economics and the Bodleian Library at the University of Oxford. More specialised material, most notably his correspondence on colonial issues from 1945 to 1959, is held by the University of Oxford's Rhodes House Library.