Shepherd was born in Chicago, Illinois, the daughter of LaVerne (d. 1991) and Lawrence A. Shepherd (born c. 1947), a church deacon. She is the eldest of three sisters.

Shepherd was previously married to Jeff Tarpley from 2001 to 2010.

In 2006, Shepherd was a frequent guest co-host on ABC's The View. She was a permanent co-host from 2007 to 2014. She received several awards for her work on the show. Since leaving The View in 2014, Shepherd has continued to make several appearances on the show as a guest host and "lead contributor" throughout 2015 and 2016.

Similar criticism erupted after the December 4, 2007, broadcast of The View when, during a discussion initiated by Joy Behar about Epicurus, Shepherd attempted to assert that Christians existed in classical Greece, and that the Greeks threw them to the lions. When confronted on this point, she further claimed that "Jesus came first" (before Greeks and Romans) and stated, "I don't think anything predated Christians", to which Joy Behar responded: "The Jews."

Shepherd garnered ridicule after admitting to never voting partly due to her upbringing as a strict Jehovah's Witness. She was quoted as saying that she just "never knew the dates or anything"; she stated, "I've never voted for anything in my life." In January 2008, Sherri referred to Gospel singer Shirley Caesar as "the black Patti LaBelle." LaBelle, like Caesar, is black.

Shepherd wrote the book Permission Slips: Every Woman's Guide to Giving Herself a Break, published in October 2009. Shepherd also has a co-author credit on Plan D: How to Lose Weight and Beat Diabetes, published in 2013.

TV Writer Lamar Sally proposed to Shepherd on December 26, 2010. They married in August 2011 at the Fairmont Hotel in Chicago, and in September 2012, Shepherd said the couple was searching for a surrogate in order to have a child. Sally filed for separation on May 2, 2014, and Shepherd filed for divorce days later. In July 2014, Sally petitioned a Los Angeles court for full legal and physical custody of the child expected via surrogacy, who was born in August 2014. On April 21, 2015, a Pennsylvania court ruled Shepherd is the legal parent of a child born from a surrogate mother. The child has no DNA link to Shepherd.

In 2011, Shepherd offered to pay six months' rent and utilities of homeless former American Gladiators star Debbie Clark (Storm).

In March 2012, Shepherd participated as a Celebrity contestant on the fourteenth season of ABC's Dancing with the Stars. Her dance partner was Val Chmerkovskiy. The team lasted several weeks.

As of 2015, a project includes a line of wigs and hair add-ins.