The legendary member of SOLDIER, Sephiroth goes insane when he learns of Jenova and plans to take the planet back for his mother. However when confronted by a rookie Cloud, he jumps into the lifestream, taking Jenova's head with him.
Sephiroth's body drifts via the lifestream to the Northern Crater, where he is able to return years later due to his strong will. Armed with the knowledge of the lifestream, he is able to manipulate Cloud as well as manifest himself to the group throughout the game.
After obtaining the black materia, he is able to summon meteor in which he plans to destroy the planet and become a god. Ultimately he is defeated by cloud in a battle that exists in both the physical and mental planes.
Advent Children centers around the Reunion occurring. For Kadaj, Loz and Yazoo, that is their ultimate goal. But they do not realize that they are actually doing Sephiroth's bidding. For him to return and to continue what he was unable to do at the end of FFVII.
When Kadaj merges with Jenova, Sephiroth is able to return and Cloud is face to face with his nemesis. Sephiroth never forgave Cloud for the problems he had caused him, and for the defeat he was given and is focused on setting things right.
Although Sephiroth is once again defeated, his final words "I will not remain a memory" hint that perhaps we haven't seen the last of him.