While growing up, Hojo influenced him a little by telling him his mother was Jenova.  He never knew his real parents.  When Sephiroth and Zack go to Nibelheim, Sephiroth questions his humanity.  He isolates himself in the Shinra Mansion Basement Library.  He studies the books and learns of the Cetra and Jenova.  It is at this time Sephiroth loses his mind and is convinced he and Jenova are the true rulers of the planet.  He thinks that he is really a Cetra and so is his "mother," Jenova.

In the reactor, Sephiroth slices everyone that got in his way (Tifa's father, Zack, Tifa, and Cloud).  However, Cloud is able to lift Sephiroth and throw him into the bottom of the Reactor.  Sephiroth is then somehow taken to the North Crater, where his true body lies in a Mako Crystal.

Sephiroth's clones that Hojo made are controlled by Jenova and after some time.  Because Cloud had Jenova cells also, Cloud began to feel this effect on his first mission with Avalanche.  Through out his journey, Jenova often "spoke" to him and gave him advice. 

When Avalanche finally had the Black Materia, Jenova forced Cloud to directly hand it to Sephiroth.  Avalanche takes it back in the North Crater, but Jenova makes Cloud hand it to Sephiroth once more.  The clones are killed and Sephiroth summons Meteor to become a god.  He wants to cause a huge wound to the planet that would take a lot of energy to heal it and Jenova wanted to be in the middle of that energy.(Sephiroth says this, but in reality its Jenova's plans.) Sephiroth is the only thing holding Holy back from saving the planet, so Avalanche goes and kills him.