When William Birkin, Sherry's father, completed his work on the G-virus in mid-1998, he refused to hand it over to Umbrella, opting to sell it to the U.S. Government instead. In response, a special forces unit was sent to retrieve the G-virus.
During the struggle, Birkin was fatally injured and injected himself with the G-virus to seek revenge. In the process many virals with the T-virus were shattered and the contamination made its way into the sewers, where rats carried it into the nearby Raccoon City.
Sherry's mother, Annette, contacted Sherry at East Raccoon Elementary and had her head home, where she told Sherry to get her locket and hide in the Raccoon City Police Department. She eventually was rescued by Claire Redfield, who was seeking her missing brother Chris Redfield, who protected her while the two worked to escape the city.
During their escape, they are stalked by the mutated William Birkin and when separated and unconscious Birkin implants Sherry with a G-embryo.
Reunited with Claire, Sherry exhibits symptoms of implantation and her body eventually accepts the embryo (due to the shared bloodline with Birkin). Finding a safe place to hide, Claire heads off in search of a cure in the underbelly of the Unbrella Labratory.
Finding Annette, who is then fatally wounded by Birkin, Claire learns how to create the G-virus antidote DEVIL. Creating the antidote, the girls and Leon S. Kennedy make their way to the train as the labratory self destructs.