Kingdom Hearts Birth by Sleep
Although Sephiroth does not actually appear in Kingdom Hearts Birth by Sleep, during the credits a black feather falls before Zack at the Olympus Coliseum, hinting the presence of Sephiroth. Also, Zack mentions to Terra that he aspires to become a hero like "another"; Nomura has confirmed that he was indeed referring to Sephiroth.
During the Platinum Match at Olympus Coliseum, Sephiroth appears and fights Sora. He is a secret boss available in all but the regular Japanese version. After having been defeated by Sora, Cloud finally meets Sephiroth. In silence, Sephiroth implores Cloud to turn to the darkness, which Cloud refuses. The two engage in a high-speed battle in the air, the outcome of which is unknown; however, this is only in the Kingdom Hearts Final Mix. In the original Kingdom Hearts, it is never shown that Sephiroth and Cloud ever meet, or that Cloud is even aware Sephiroth is a challenger in the Olympus Coliseum.
Kingdom Hearts II
Right before the invasion of Hollow Bastion, Cloud warns Sora and company about Sephiroth, and his ways of the darkness. Later, as Sora exits the castle to go help defend against the invasion, Sephiroth appears. He asks about Cloud's whereabouts, and although Sora says nothing, Donald and Goofy retort that Cloud realizes that Sephiroth is the manifestation of his darkness. Seeing that Cloud is becoming enlightened and desires to fight him, Sephiroth takes his leave.
During the battle, Cloud is surrounded by Heartless, but Sephiroth intervenes, defeating them all in one swipe. Cloud intends to defeat his nemesis to escape the darkness, but Sephiroth only replies that Cloud will never be able to do so, and will always cower in the light. Cloud vehemently denies his dark half's claims, but Sephiroth is undeterred, and leaves just as Tifa arrives.
After the Master Control Program is defeated, Sora encounters Sephiroth at the Dark Depths in Hollow Bastion. The villain again asks about Cloud, but Sora and his companions do not reveal anything. He then inquires about Sora, Donald, and Goofy's identities, but again, they refuse to answer. Sephiroth then notices Sora's Keyblade, and attacks, intending to test Sora's power and that of the Keyblade. Even though Donald and Goofy are with Sora when you confront Sephiroth, they do not fight against him with Sora since Sephiroth only wishes to battle with the Keyblade master. Sora appears to overcome him, but Sephiroth just shrugs off the battle. Sephiroth compliments Sora on his skill with the Keyblade but says that Cloud is the only one that can "eliminate him". Sephiroth then tells Sora to find Cloud so that they can settle their feud.
Cloud arrives later, and a battle begins, with Sephiroth desiring to draw Cloud into the darkness. However, Tifa protects Cloud, saying that Cloud does have light in him, and that, even if he doesn't, then he just needs to be surrounded by light. Nevertheless, Sephiroth and Cloud start off for another battle, and after Tifa's intervention, Cloud glows in light, surprising Sephiroth and letting his guard down. The two disappear in a brilliant flash of light. Their location and status are unknown.
Despite the fact Sephiroth and Sora can battle in Kingdom Hearts, his dialogue with Sora in Kingdom Hearts II implies that their encounter in the first game never happened, since Sora, Donald and Goofy don't know who he is, and Sephiroth doesn't seem to know them either. However, Sephiroth says "so that's a Keyblade", indicating that while he may or may not have seen a Keyblade before, he at least knows of them. His battle quote, "show me your strength", demonstrates that in his battle with Sora he wished to test his power, and see the Keyblade in action.
Sephiroth's appearance in both Kingdom Hearts and Kingdom Hearts II is largely the same as his appearance in the various games of the Compilation of Final Fantasy VII, though with a few significant differences. He has his distinctive long, silver hair with long bangs that frame his face, and dresses in a black leather coat. The coat has a large collar that reaches his ears even when folded back and is kept closed by a black belt with a silver buckle around his waist. Unlike in the Final Fantasy games, Sephiroth's coat has red-violet lining in the front. It is also noticeably more tattered in the Kingdom Hearts games. In Kingdom Hearts, Sephiroth also has regular blue eyes, unlike the green, catlike eyes he and his Remnants have in the main series. The sleeves of his coat end in metal rings in place of normal cuffs, and he wears black leather gloves. For some reason there is an odd, black and red, fin-like growth on his right forearm. Sephiroth's face looks strikingly like Cloud's, which is something that Goofy comments on in Kingdom Hearts II. This similarity would explain Sephiroth's difference in eye color from his original incarnation.
Sephiroth's chest is exposed, showing that he wears some sort of grey strap around his abdomen with two black belts over it, as well as two brown, overall-esque straps that intersect over his chest. He wears black pants and knee-high boots of the same color, with two grey belts wrapped around each boot. He wears a silver pauldron over each shoulder, both of which closely resemble the pauldrons he wears in the Compilation of Final Fantasy VII series. In both games, Sephiroth sports a large, navy blue wing on his right shoulder, a design feature that has carried over to several characters associated with Jenova in the Compilation of Final Fantasy VII. In Kingdom Hearts II, he gains two more wings of the same color sprouting from either of his hips. Also in both games, Sephiroth carries his iconic weapon, the Masamune (which is a katana with a massive length but thin width, making the sword resemble a Nodachi), as his weapon. Sephiroth is also one of only two characters who did not reappear in their Advent Children attire, the other being Cid.
Role in the series
Sephiroth was the son of the original Lich King before Scar took over that position as a dark essence from the heart of Cloud Strife, the bold and unusual adopted son of a great defender of Radiant Garden. Now the one-winged angel serves in the Villain League as a powerful warrior commander. He has never been encountered by the Lodgers for years, however, because he and Cloud are still hunting each other down, and the two barely come across the Lodgers since they drove the Villain League out of Hollow Bastion and reduced them into renouncing extremism and going to another hideout. However he meets his final end after the events of Princess Salvation when Mirage was losing herself with the depowering of the Mask of Bastet, seeking revenge in Radiant Garden during Sora and Kairi's wedding. He steals all the magic from a reserve fountain and tries to destroy the heroes and Radiant Garden with his trademark ability of Supernova, transporting the entire world into a dying dimension. Though he comes close, he loses his magic powers due to the death of the Magic Realms, resulting in his demise in the hands of Riku's new girlfriend Erica Wedlock.