On the right wing of the National Party, Shipley became increasingly disillusioned with Bolger's cautious policy approach and began to challenge his leadership in 1997. During Bolger's absence at the Commonwealth heads of government conference in the UK, in November 1997, she consolidated her position and on his return warned him that she had enough support within the parliamentary party to force his resignation. This persuaded Bolger to resign as party leader and she was elected as his replacement and became, in December 1997, New Zealand's first female prime minister. She headed a coalition with the New Zealand First Party, led by Winston Peters.

Born in Gore, on the southern tip of South Island, Shipley, who was brought up in Wellington and Blenheim, was the daughter of a Presbyterian minister who died while she was in her teens. She began her career as a teacher and then, after marriage, became a farmer.