During this time Shelley lived for a while at the college-owned house 54 Radcliffe Road, Bolton, where he was influenced by other students, wrote songs and practised playing music in the cellar. He was engaged for a time to fellow student Hilary Collins. His breakup with Hilary was highly traumatic but his emotional pain gave birth to some of his first groundbreaking work.
In 1977, they released their first EP, Spiral Scratch, on their own independent label, New Hormones. The song "Orgasm Addict" garnered attention in and beyond the Manchester punk scene but afterward singer Howard Devoto left the group. Shelley continued to front the band, creating such quintessential punk singles of the period as "What Do I Get?", and "Ever Fallen in Love (With Someone You Shouldn't've)" along with three LPs, Another Music in a Different Kitchen (1978), Love Bites (1978), and A Different Kind of Tension (1979), until difficulties with their record company, and a dispute over the U.S. release of their greatest hits record, Singles Going Steady, brought Buzzcocks to a halt in 1981.
In 1981, Shelley released his first solo single, the song "Homosapien", which had originally been written for the next Buzzcocks LP. On this recording he returned to his original interests in electronic music and shifted emphasis from guitar to synthesizer. The song was banned by the BBC for "explicit reference to gay sex", which didn't stop it from becoming enormously popular in dance clubs in Europe and North America. At this time, Pete Shelley also talked about his bisexuality, which had been implicit in many of the Buzzcocks songs he had written but now came to attention due to "Homosapien" and the BBC ban. The same year saw the controversial single followed by an LP of the same name.
Shelley released his second LP XL1 in 1983 on Genetic Records. In addition to the minor hit "Telephone Operator," the album included a computer program for the ZX Spectrum which featured lyrics and graphics which displayed in time with the music, an innovative precursor to the visuals of today's media players. XL1 was produced by Martin Rushent and Shelley.
June of 1986 saw Shelley release the darker, edgier Heaven and the Sea, an album that drew comparisons to Love and Rockets, Gary Numan and late period Ultravox. In 1987 he followed the album with a new song, "Do Anything", for the film Some Kind of Wonderful.
In 1989 Shelley recorded a new version of "Homosapien" billed as "Homosapien II." The single featured four mixes of the new recording.
Shelley has also played with various other musicians during his career, including a stint with Pauline Murray of Penetration for her LP Pauline Murray and The Invisible Girls, who backed punk poet John Cooper Clarke. Shelley also collaborated with a band called Tiller Boys, which was comprised of assorted punk veterans, and Zip. He briefly reunited with Howard Devoto to make the LP Buzzkunst, released in 2002.
A substantially sped-up club remix of "Telephone Operator" is a standard offering on the Dance Dance Revolution arcade game.
In 2005, Shelley re-recorded "Ever Fallen in Love" with an all-star group, including Roger Daltrey, David Gilmour, Peter Hook, Elton John, Robert Plant and several contemporary bands, as a tribute to John Peel. Proceeds went to Amnesty International. Shelley also performed the song live, with several of the aforementioned, at the 2005 UK Music Hall of Fame