Shankar Nag was born on 9 November 1954 in Karnataka (in Mallapur village from Honnavar taluk (Near Kumta) of Uttara Kannada district). After completing formal education, Shankar moved to Mumbai). In Mumbai he was attracted to Marathi theatre and immersed himself in theatrical activities. Incidentally, he met his future wife, Arundhathi (ಅರುಂಧತಿ) during a drama rehearsal.
Shankar Nag then shifted base to Karnataka. His elder brother Anant Nag had already established himself as an actor and urged Shankar to act in films. He was offered a role of a mercenary by Girish Karnad in the epic movie, Ondanondu Kaaldalli, which was loosely based on Akira Kurosawa's masterpiece, Seven Samurai. His debut film as actor fetched him a national award at the Delhi International Film Festival. Thus began his film career, where, in a span of 12 years (from 1978 to 1990) he acted in some 90 Kannada movies, as a leading man, besides co-producing (with actor-brother Anant Nag ) and directing some films like 'Minchina Ota' (a rare example of a heist movie in Kannada) "Janma Janmada Anubandha" and "Geetha" (both of which had melodious music by South Indian maestro Ilayaraja)