The Shangpa Kagyu Lineage originates in the 11th century, with the great Tibetan scholar and spiritual master Khyungpo Naljor. Although he had studied the Bon, Maha-Ati and Mahamudra traditions in Tibet, he was still not satisfied with his understanding at the age of 57; he journeyed to Nepal and India seeking more teaching. His search for spiritual teachings culminated in his meeting with female mystic Niguma who had seen Buddha Vajradhara herself. From Niguma he received many teachings, in particular, the special tradition of Mahamudra and the 7 teachings of Niguma. Khyungpo Naljor also met and studied with Sukhasiddhi another female mystic and student of Virupa as well as Vajra-assana Maitripa, Rahula and others.

Upon his return to Tibet, he established a Monastery at Shang-Shung in central Tibet, which became his main seat and he became known as the Lama of Shang. Khyungpo Naljor had thousands of students and established hundreds of Monasteries but only transmitted the teachings he had received from Niguma and Sukhasiddhi to only one of his students, Mokchok Rinchen Tsondru. The Shangpa lineage is often referred to as the "secret Lineage" because Niguma had instructed Khyungpo Naljor to transmit the teachings to only one student for the first seven generations beginning with the Buddha Varjradhara and Niguma. Khyungpo Naljor passed on the teachings to his disciple Mochok Rinchen Tsondru. From Him the lineage was passed to Kyergang Chokyi Senge, Nyen-ton Rigung Chokyi Sherab, and Songjay Tenpa Tsondru Senge. These first seven teachings are known as the Seven Great Jewels of the Shangpa tradition. Songjay Tenpa was the first teacher who gave these instructions to more than one of his disciples, and from this point on, several different lines of transmission developed. The intention for keeping the lineage secret in this fashion was to protect it from becoming an established monastic tradition. As one of the more esoteric traditions, it was meant to be practiced rather than codified.

There are many special teachings in the Shangpa Lineage but the most important are called the Five Golden Teachings, which are likened to the parts of a tree. The roots of the tree are the Six Teachings of Niguma; the teachings on Heat, the Illusory Body, and the Dream sate, Sheer Clarity, Transference and the Bardo between death and birth. The trunk is considered to be the Locket tradition of Mahamudra, which combines Mahamudra teachings of Niguma, Maitripa and Sukhasiddhi. The branches of the tree are the three methods of carrying one's understanding in meditation into daily activity. The flowers are the practice of development and completion with the White and Red Dakinis. The fruit is the Teachings on the Deathless Nature of mind and body.

The principal Shangpa Kagyu protector is the 6-armed Mahakala, and it was from this transmission that the practices of this Diety spread to many other schools. Although the Shangpa Lineage were highly regarded and assimilated by many schools of Tibetan Buddhism the tradition itself ceased to exist an independent school wit the dissolution of the Jonangpas in the 17 the century. However its teachings continued to be practiced being transmitted from teacher to disciple. In the 19th century Jamgon Kongtrul gathered together the surviving Shangpa traditions, which ensured their continual survival by including them in his book The Treasury of Key Instructions.

The the principle teacher of the Shangpa Kagyu lineage was His Emminence Kalu Rinpoche who received the Shangpa lineage teachings in the early 1940s when he went for training at Tsa Tsa Monastery in Eastern Tibet. He trained with with the Abbot of the monastery, His Holiness the eighth Tsa Tsa Drubgen, Yizhin Norbu, also called the White Crown Master. There, Kalu Rinpoche received the complete cycle of the Shangpa teachings during a closed three year Retreat.

After His Eminence Kalu Rinpoche passed into Paranivana his Heart-Son Bokar Rinpoche became the head of the Shangpa Lineage. After Bokar Rinpoche passed the present head of the Shangpa Kagyu lineage is Yangsi Kalu Rinpoche who is soon to compleat his first Shangpa three year Retreat at Bokar Monastery.