Karl D. Bays grew up in eastern Kentucky. He held various jobs, including mowing lawns and working as a lifeguard, grocery clerk, and construction worker. Bays' father, who completed only six years of school, worked for the Louisville & Nashville Railroad for 50 years.
Despite being involved in a serious car accident, Bays attended Eastern Kentucky University and graduated with straight A's. He was president of the Christian Men's Fellowship and a member of the Lettermen Club for football. After graduation, he declined an offer from the Chicago Cardinals to play football. Instead, he joined the U.S. Marine Corps for two years and then earned a master's degree in business from Indiana University.
In 1958, Bays and his wife moved to Louisville, where he began his career with American Hospital Supply Corp. At age 40, he was named chairman of the board. Under his leadership, the company grew fivefold.
In the civic arena, Bays was active in church activities and the Boy Scouts. He served on the board of trustees of Duke University and Northwestern University. Both President Richard Nixon and President Gerald Ford appointed Bays to advisory councils.