If you have a more mature dog who is shy, help the dog gradually gain confidence. It’s especially important to control any situation you introduce him to. Enlist the help of people you can trust to follow your instructions. Here’s one approach:
Have your helper avoid eye contact with the dog, stay quiet and still, stand sideways to the dog, and keep at an ample distance from the dog. Do not force the dog to approach the person. Instead, let the dog initiate contact and approach when he feels ready.
The helper can crouch down or sit on the floor, maintaining the nonthreatening sideways stance, with eyes still averted. Give the helper some small tasty high-value treats, which may mean something really strong like liver cookies available at pet supply stores or bits of hot dog. Have the helper extend a hand in the direction of the dog and drop a treat. Eventually the dog will sniff around and slowly approach. Most likely, the dog will take the treat and retreat a bit to eat it. The helper should leave the hand extended, but not reach at the dog. Next, have the helper keep the treat in his extended hand.
The owner has a role to play during these exercises. Project a happy, relaxed body posture and tone of voice. Make it clear that you welcome the helper’s presence. However, avoid too much chatter with your helper, and avoid distracting your dog. Ignore your dog if she tries to cling to you or beg for attention. Also make sure not to comfort the dog, verbally or physically, at times when the dog displays timidity or fear, since you do not want to reinforce these undesirable behaviors. You want your dog to get the clue that during these practice sessions, your helper is the only source for treats and positive interaction.
Eventually, the dog will show signs of budding confidence. Ideally, the dog will touch the helper’s hand upon taking the treat. The helper can softly say, “Good dog”. When the dog seems somewhat secure, the helper can gently stroke the dog under the chin or on the neck or chest (be aware that shy and fearful dogs are often frightened when people attempt to touch their face or head). Eventually make eye contact. However, progress slowly to avoid the setback of a fear response.
It might take a few of these set-up encounters for the dog to feel comfortable enough to approach at all. So be patient. The results will be worth it.
As the dog gains confidence, repeat the practice sessions in other rooms and then outside of the home, and with different helpers of varying ages, sizes, and gender. Gradually expose the dog to new experiences and whenever he shows the slightest sign of relaxing or sociability, reward him with very tasty special treats. Carry them with you in a little baggie at all times.

Is your dog shy around someone in the home, or certain types of individuals?
If your dog is shy around men, for example, have a man prepare and set down the dog’s meal. If the dog is fearful of someone in the family, consider the possible reasons. Perhaps that person is doing something to invoke fear, even if the person is unaware of it. Perhaps the person speaks in a booming voice, makes a lot of noise or sudden movements, or tends to invade the personal space of others; in such cases, the person should try to tone down his or her behavior.
If it seems the dog’s fear relates to the size or gender or physical traits of the person, work daily on desensitizing the dog to the person, and counter-conditioning, so that the dog learns to associate POSITIVE experiences with men/big people/people in wheelchairs etc.

Here’s one technique for building a bond between the dog and a person he fears in the household: let that person be the one to feed, walk and eventually play with the dog. The objective is to have the dog realize that good things happen with this person, that he must depend on this person for interaction, and that this formerly scary being can be trusted and will not hurt him.
During the weeks you are working on counter-conditioning the dog so that he overcomes his fears, limit the interaction the dog has with the “safe” or “preferred” person with whom he has bonded. This preferred person can be present when the other person is feeding the dog or attempting to engage the dog in play, thus providing somewhat of a security blanket. But the preferred person must avoid interacting with dog so that the dog realizes he is dependent on the “other” person for good things such as food, treats, fun and exercise.

If you are the preferred person, and your dog clings to you, ignore him. He will realize that if he wants to eat or play, he must interact with the “other” person.
This person should not impose his or her will on the dog. And at the beginning, he should avoid eye contact with the dog. Rather than issue commands, the person should “ask” the dog to go to her crate or special place, “ask” the dog to sit, and then set down the food bowl. (This presumes that the preferred person has taught the dog the meaning of “sit”. It is always a smart idea to teach pups and dogs to sit before they get their food bowl, treats, toys, and before they get to go outside.)
To convey the least threatening demeanor, the person can start out sitting on the floor, averting his eyes from the dog, while holding the food bowl. The decision to approach is left up to the dog. When hungry enough, the dog will begin to approach. The person can very quietly and gently praise the dog for approaching. The intensity of the praise can increase and eye contact can take place gradually as the dog displays more trust in the person.
If you are the dog’s preferred person, you may find it hard to withhold attention and affection. However, by doing so, your dog will learn to seek attention, affection, food, treats and play from the other person and eventually build a bond with that person.
Remember to praise and give rewards (which can be yummy treats or a very favorite toy) for even the tiniest signs of progress. Small signs can be anything from a tentative approach to ceasing to duck behind the couch when the other person enters the room.
Be patient, and avoid pushing the dog along too quickly. It takes time, but this approach nearly always works. Some dogs actually transform into outgoing, highly confident canines. But the key goals are for the dog to learn that people can be trusted and to learn how to interact with all family members in a positive way.
Is your dog shy around other dogs?

Start off by introducing the shy dog to a smaller dog who you know to be friendly and relatively calm. As the dog begins to get comfortable, gradually introduce dogs of larger sizes and more active behavior. This process typically will take several weeks, so again, be patient. Avoid interactions with rough and tough dogs, or you will have a setback.
A good environment for socialization with other dogs, especially for puppies, is a carefully supervised puppy kindergarten or play group. Observe a class or two before signing up, since you want to make sure that the trainer controls the environment and does not allow more dominant dogs to bully others.
Obedience training and agility classes:

Obedience training and agility training are excellent ways to help a dog feel more comfortable and confident in public and with other dogs and people. Just as it works with people, learning new skills improves the dog’s outlook on life as well as self-confidence. For many dogs, as with people, problems result when brains and energy are underutilized.
The more skills your dog learns, the more positive things your dog will have to focus on  distracting her from dwelling on the things she previously feared. Start by teaching “Sit”, “Stay” and “Down”  very useful commands that will also help the dog gain a sense of accomplishment and have something to do to earn your praise.
If you’ve recently adopted a very shy dog, you may want to spend the first week or two working on bonding with her and developing her trust before starting a group training class. However, it is good to start teaching a dog desired behaviors and healthy, positive responses to new people, dogs, places and things as soon as possible.

Another important training tip:

The shy or fearful dog can be frightened and even traumatized by forceful training methods. Today, the emphasis in the dog training world is positive, reward-based training, even for confident, untroubled pups and dogs. So for the best experience for you and your shy dog, focus on gentle, positive methods.
The first goal is to gain your dog’s trust. Next, build confidence. Then to encourage desired behaviors, reward those behaviors, and incremental progress, with gentle, happy verbal praise and small tasty treats. For those behaviors you want to eliminate, try ignoring them, or at most, issue a clear but gentle “no” or “ah-ah-ah.”
For example, instead of giving a leash correction when your shy dog engages in nervous barking, ignore the barking. Try to redirect your dog’s attention to you. As soon as the dog stops barking, give praise and a tasty treat to reward the “quiet” behavior. Eventually, the dog will realize that nervous barking is not an effective response to whatever triggered her fear.
Some ideas for playing with a shy dog:

* Here’s a nonthreatening way to play with your shy dog: crawl around on the floor and roll over. This will get the dog’s interest. Then you can entice the dog to follow you around the room. Not only will this entertain your dog, but also foster the idea of following you. As leader, you want your dog to look to you and follow you.
* When having guests at your home, you can have them sit on the floor. Instruct them to avoid any eye contact with your dog, and to refrain from talking to the dog. Explain that you have a shy dog and you are trying to help him learn to be more trusting of people. Don’t force the dog into the social setting. However, when the dog begins to approach your guests out of curiousity, have them nonchalantly turn their backs to the dog. Give each guest a handful of treats and have them drop the treats, one at a time, behind them. When the dog gets comfortable enough to take the treats from the floor, your guests can then extend a treat in an open palm behind them, encouraging the dog to take treats from their hands. (Of course, do not try this game if your dog tends to nip.) Eventually, the guests can turn their bodies toward the dog, and over time, even establish gentle eye contact.
Some words about fear aggression:

* Often, fear aggression results from the dog feeling uncertain of the outcome of an interaction  fear of the unknown. Aggression is a panicked response stemming from loss of control. Ignorance leads to fear, and fear leads to aggression. The dog may feel at risk of injury, and might sense that confrontation is inevitable.

* It is not uncommon for a dog to overreact. Canines typically have difficulty generalizing; they are slow to translate past lessons to new situations. This explains the dog who gets along well with another dog living in the home, but who fears other dogs encountered outside. Most likely, the dog has not been properly exposed to other dogs in a safe and controlled environment. Group obedience classes can be very helpful.

Ways to help prevent shyness … and help deal with shyness:

* Take your pup out with you when you run errands. Introduce the pup to as many people and dogs as possible, making sure you control the situation so that nothing happens to frighten the dog. If you have a young pup who has not yet had vaccinations, you might want to carry the pup, especially in areas in which the pup could pick up germs.

* Host a doggie party at your home. Invite only friendly pups and dogs. Always supervise, and intervene at the first sign of unfair or overly rambunctious play, or any aggressive behavior displays.

* Teach your pup or dog obedience skills. The more she knows how to do, and the more skills she can display to earn praise and treats, the more confident she will be.

* Take your pup or dog on walks. Stay relaxed yourself. Particularly if your dog is shy, fearful or shows aggression to passing dogs, joggers or bicyclist, you may be given to tensing up on the leash when in public. The problem with this is that it telegraphs your fear to your dog, and gives your dog more reason to fear other people or animals. Certainly, make sure that you have control of your dog, which includes making sure that you use a properly fitting collar (and a type recommended by a canine behavior specialist), that you keep your dog relatively close to you, that you teach your dog to look at you on command, that you have earned your dog’s trust as leader of the pack … and that you keep watch for situations that can trigger the dog’s fear response. It is your job to protect your dog. However, this calls for confidence, not seizing up on the leash or getting nervous.
Take care to allow a safe zone of space between your dog and oncoming people, dogs and things. If somebody approaches you too quickly, or gets too close, warn the person off right away (“please step away, thanks; I am working on some issues with my dog”).

While it is natural to many dog owners to tighten the leash when noticing an oncoming dog or tottering child, consciously retrain yourself to remain calm and practice other problem avoidance techniques, such as confidently switching direction. If a loose dog continues to approach, you might throw a treat or stick to get the other dog to run off. By staying calm, you’ll have a clearer head.
When your dog begins displaying more trust and staying calm during such close encounters, happily praise the dog and offer a treat. For the shy or fearful dog, however, use a calm vs. overly exuberant tone of voice.
Remember, do not force a dog to interact with a person or other canine. Let the dog decide when he is ready to venture closer. If the dog chooses not to engage with the person or dog, that’s OK. The dog will find his comfort zones over time.
* Do not comfort and coddle your dog when he displays fear. Yes, protect him from potential and real threats, but do not reward his fear responses with attention and affection. Otherwise, like a child, your dog will learn that such responses will be rewarded. Instead, encourage, watch for and reward positive (or at least increasingly positive) responses to various stimuli such as new people, approaching dogs, strange noises, and so on.

* All dogs need exercise every day. Among other benefits, exercise helps reduce canine stress and makes dogs happier particularly important for the shy dog.

* Yawning serves as a “calming signal” for dogs. People can actually adapt this to work in communicating with their dogs. When your dog seems nervous, you can sit near him, turned sideways, and yawn for a few minutes  the longer you do this, the more effectively you’ll calmer your dog.

* Establish a safe den in your home. While particularly important for the shy dog, even the most confident and stable dog may have reason to occasionally retreat to a private place. And there will be times when you want your dog to be separated from the action; for example, if you’re hosting a boisterous party, having repairs done in your home or entertaining your children and their friends. So establish a place in your home where your pup or dog can retreat and relax undisturbed. This place should be in an area used by the family, but not a high-traffic area. Preferably, the area can be closed off with you have a large gathering or strangers in the home. The dog’s “place” can be a large, comfy blanket surrounded by some favorite toys and a filled water bowl, or a wire crate (also with toys and water bowl). Before expecting your dog to realize that’s his spot, take time to teach him by creating positive associations with his special den.

* Read the other tipsheets listed below.

Helpful Resources

Books

The Cautious Canine by Patricia McConnell. Brief but powerful blueprint for helping a shy or fearful dog with gradual desensitization and counter classical conditioning. So much aggression in dogs results from fear, but fear-based problems can become worse if treated incorrectly. This booklet can help you solve minor behavioral problems and prevent serious ones, whether your dog’s fears include the vacuum cleaner, people with hats or the stranger at the door. Learn how to pinpoint what triggers your dog, create a step-by-step treatment plan and monitor your progress. You’ll discover how to help your dog gain confidence … and why you need to treat the fear and not just your dog’s reaction to the fear. This little gem has changed the lives of countless dogs with shyness, fear and reactivity problems.

Help for Your Shy Dog by Deborah Wood. This book does a great job addressing ways to work with dogs who are shy or fearful dogs due to temperament or personal experience. Packed with practical, sound advice that can be integrated into day-to-day interaction with your dog.