The tournament was initially proposed by then Northern Ireland manager Lawrie Sanchez in 2006. On 18 September 2008, the national football associations of Scotland, Wales, Northern Ireland and the Republic of Ireland announced plans to hold an international tournament in 2011. The tournament was due to start in 2009, but was delayed until 2011 due to 2010 FIFA World Cup qualifying fixtures already being in place.
It was announced on 12 August 2010 that the tournament would be sponsored by brewing company Carling, and known for sponsorship reasons as the Carling Nations Cup. The inaugural tournament was played at the Aviva Stadium in Dublin in February and May 2011, and won by the Republic of Ireland. A second tournament was provisionally scheduled to take place in Wales in 2013. After the first tournament, which attracted some small attendances, there was a dispute about the division of revenues between the four associations. Jim Shaw, the president of the Irish Football Association, said in January 2012 that he did not envisage a second tournament being staged.
The Nations Cup was structured as a round-robin, with each team playing each of the others once, resulting in a total of six games in each season of the competition. Three of the teams involved (Wales, Scotland and Northern Ireland) had formerly competed in the now defunct British Home Championship, along with England. The Football Association of Wales stated its belief in 2007 that England might have joined at a later date if they could have been convinced that there were "practical solutions" to problems like fixture congestion. In early 2011, it was reported by BBC Sport that there was a possibility of the British Home Championship being revived in 2013, however no tournament was held. The matches in the 2011 tournament were played in February and May, with the location due to rotate on a tournament-by-tournament basis.Brittany also expressed an interest in taking part.
The 2011 Nations Cup began in February 2011 at the Aviva Stadium in Dublin. The Republic of Ireland won the inaugural tournament after winning all three of their matches, culminating with a 1–0 win over Scotland on the final matchday.