Shepherd's field is located near Bethlehem, at the outskirts of the city. The city was originally called Ephrath in the book of Genesis and Ruth. Its location is roughly five miles to the south of Jerusalem. The terrain of the city, which makes it 2,550 feet above sea level, puts it higher than Jerusalem.
The first place in the Bible the city near Shepherd's field is discussed is as the burial location of Jacob's most beloved wife Rachel, who perished in childbirth (Genesis 35:19, 48:7). Bethlehem is also where King David was born and where he, as a youth, tended and fed his father's sheep (1Samuel 17:15). It is also where the prophet Samuel anointed him as the next king of Israel (1 Samuel 16:4 - 13).
It was over this field, where flocks were being watched over, that an angelic host first announced the birth of Jesus to the world.
9 An angel of the Lord appeared to them (those who were tending their sheep just outside Bethlehem), and the glory of the Lord shone over them. They were terribly afraid, 10 but the angel said to them, 'Don’t be afraid! I am here with good news for you, which will bring great joy to all the people. 11 This very day in David’s town your Savior was born - Christ the Lord! (Luke 2)
Jesus' birth fulfilled several Old Testament prophecies including those in Genesis 3:14 - 15, 12:3, 17:17,19, 49:10, Isaiah 7:13-14, 9:6 - 7, Deuteronomy 18:15, Psalm 45:6 - 7, Micah 5:2, Daniel 9:24 - 25, Jeremiah 31:15 and Hosea 11:1.
The shepherds, however, who heard the angels shout for joy over the birth of the Messiah, were not your average sheepherder. They took care of a very special set of sheep. According to Alfred Edersheim in his book Sketches of Jewish Social Life, they were watching sheep that eventually would be offered as sacrifices in Jerusalem's Temple.
There is no doubt it was these same shepherds from the outskirts of Bethlehem who, when they arrived in Jerusalem, help spread the news that the Messiah has finally arrived.
An ancient tradition states that some shepherds specified that they be buried with a tuft of wool in their hand. This was supposidly done to prove they were shepherds on Judgment Day, so that they could be forgiven for the many times they missed church services due to being in the field.