Tennyson's poem tells of an Arthurian lady confined to a tower on the island of Shalott, forbidden to look directly out toward Camelot and permitted to see the world outside only as it appears in a mirror opposite her window, which she weaves into a tapestry at her loom^[1]. She has never been tempted to break the rule until she catches sight of the knight Lancelot riding toward Camelot; she turns to watch him directly, the mirror cracks from side to side, and she recognises that the curse, whose exact nature she has never fully understood, has now fallen upon her^[1]. Waterhouse chose the poem's final movement, after the mirror has cracked, showing the Lady already in the boat that will carry her toward Camelot and her death, rather than the earlier moment of weaving at the loom that many earlier illustrators had preferred.

By the time Waterhouse painted his version in 1888, The Lady of Shalott had already attracted several major treatments from the Pre-Raphaelite circle. Elizabeth Siddal painted the Lady at her loom around 1853, intending to submit the work to the Royal Academy's Summer Exhibition, choosing the pivotal moment when the web floats free and the mirror cracks^[1]. Dante Gabriel Rossetti and William Holman Hunt both illustrated the poem for Edward Moxon's 1857 edition of Tennyson's Poems, working independently on different scenes: Hunt took the earlier moment of the Lady entangled in her own threads at the loom, a composition he later developed into a large, more baroque painting with a dominating mirror central to the story, while Rossetti chose the poem's final stanzas, showing Lancelot discovering the Lady's body in her boat at Camelot, rendered in a darker, more sombre mood than Hunt's design^[2][3].

Waterhouse's picture builds as much around closely observed landscape, the reeds, the drifting boat, the reflections on the water, as around the figure of the Lady herself, a departure from the more interior, symbol-laden compositions of Hunt and Rossetti, both of which relied heavily on the poem's mirror as the central visual device^[2][3]. Waterhouse is generally grouped with the Pre-Raphaelites for his shared interest in literary and mythological subjects, although he trained later than the movement's founding members and worked in a looser, more naturalistic style, a difference visible in how directly and observationally he treats the river setting compared to the more emblematic interiors favoured by Hunt and Rossetti.