In the documentary Anvil! The story of Anvil, Ulrich states that witnessing a Y&T show was his defining moment in deciding to become a musician. In 1981, he discovered British heavy metal band Diamond Head. He was excited about the band's style of music after purchasing their debut album Lightning to the Nations, and traveled from San Francisco to London to see the band perform live at the Woolwich Odeon. Ulrich remains a fan of Diamond Head and would later mix their album The Best of Diamond Head. Upon returning to America, Ulrich placed an advert in a local classifieds newspaper looking for musicians to start a band with him. James Hetfield replied to the ad, and Metallica was formed.
Later in 1981, Ulrich met James Hetfield in Downey, California, and they formed the heavy metal band Metallica. He got the band name from a friend, Ron Quintana, who was brainstorming names for a heavy metal fanzine he was creating, and Metallica was one of the options, the other being "Metal Mania." Ulrich encouraged him to choose Metal Mania, and used the name Metallica for himself.