Karen Shepherd was born on 5 July 1940 in Silver City, New Mexico, to Ralph and LaVerna Selker. Her father was employed by the U.S. Department of Agriculture and, in accord with department policy, was transferred every two years. As a consequence, Karen lived in Panguitch, Price, Roosevelt, Springville, Ogden, and Provo, Utah. She graduated from Provo High School in 1957 and attended the University of Utah, where she completed a Bachelor of Arts degree in 1962. She obtained a Master of Arts degree in Literature the following year from Brigham Young University.
She married Vincent Shepherd in 1963 and they have two children. Following her marriage she lived at Fort Lewis, Washington, where her husband served as an officer in the United States Army. After his discharge, the couple spent two years as teachers in Egypt. They moved to Orem in 1968 and Vincent assumed responsibility of his family's wholesale oil distribution business. Karen Shepherd taught English in high school and college until 1974 when she became the Utah County coordinator for Wayne Owens's Senate campaign. She continued a career in public service as assistant director of Salt Lake County Social Services in 1975 and was appointed director of the agency in 1976 when the former director, Ted Wilson, was elected mayor of Salt Lake City. She resigned as director of the agency in 1978 and accepted the position of director of continuing education for Westminster College in Salt Lake City.
For ten years, from 1978 to 1988, Shepherd was active in the publishing industry. She, along with Jinnah Kelson and Lynne VanDam, launched Network magazine in 1978, a publication designed and written to provide a support system for Utah women who were moving toward living and working in a more equal society. As editor of Network for ten years, Shepherd also pushed to change traditional Utah cultural and social attitudes toward women. She expanded her publishing career in 1984 by organizing Webster Publishing Company. The company's publishing projects included producing booklets on women's health for Intermountain Health Care; the Salt Lake Visitor's Guide; VII, the magazine and program guide for KUED; Official Rumor, a monthly newspaper for the employees of Salt Lake City Corporation; and State Scene, a similar publication for Utah state employees.
Active in political, community, and educational affairs, Karen Shepherd served as chair of the Graduate School of Social Work Advisory Council; as chair of the Governor's Conference Democratic Policy Commission; as trustee for Westminster College; as a founding member of the Utah Association of Women Business Owners; and on advisory boards for United Way, the University of Utah Graduate School of Business, Project 2000, Planned Parenthood, and the Children's Center.
In 1988, after selling Webster Publishing, including Network, Shepherd accepted a position as director of development and community relations with the David Eccles School of Business at the University of Utah.
In 1990 she was elected as a Democrat to the Utah State House of Representatives. Two years later, in 1992, she won the Democratic nomination for Utah's Second Congressional District seat, which was being vacated by Wayne Owens. Her campaign against Enid Green marked the first time in Utah's history that two women candidates opposed each other in a general election for the United States Congress. Shepherd won the election with a 127,543 to 118,013 vote victory over Green. Entering Congress in January 1993, she received assignments including seats on the Public Works and Transportation Committee and on the Natural Resources Committee.