Sebastian Hiram Shaw was born to the Shaw family, a once-powerful clan that had since fallen from nobility. His grandfather, Cornelius Shaw, belonged to the London Chapter of the Hellfire Club until his death in 1915. When Cornelius died, his younger son Jacob Shaw coveted his father’s vacant position over his older brother, Esau. Jacob’s ambition soon attracted the attention of a scientist named Dr. Nathanial Essex—a man of many names whose other aliases included Nathan Milbury and, most notably, Mr. Sinister. A nefarious geneticist with superhuman abilities gifted to him by the ancient mutant Apocalypse, Essex forcibly tampered with the Jacob’s genes and managed to grant him useful, if unstable, shapeshifting abilities. Even with his newfound powers, however, Jacob failed to secure his father's position for himself, despite murdering his brother to get it. He fled England sometime thereafter. [X-Men: Hellfire Club #3-4]
Jacob continued working for Sinister after the scientist moved to the Alamogordo research facility in the United States, where he operated under the identity of Dr. Milbury. While there, Jacob likely worked with Milbury’s fellow geneticist, the mutant Amanda Mueller. As part of his job, Jacob scoured the globe for people who carried the X-Gene and brought them into contact with Sinister. To this end, Jacob recruited for his employer Alexander Ryking, Kurt Marko and Brian Xavier. These men would eventually father Carter Ryking, Cain Marko and Charles Xavier, two of whom ended up as mutant carriers of the X-Gene—Sinister's desire almost exactly.
Sinister genetically altered each of these kids, writing a backup copy of his own DNA onto theirs. Referred to as "Project Cronus," a reference to the Greek god who devoured his own children, this scheme provided a failsafe for Sinister: in the event that he were ever to die, his genes would activate within one of the altered children, allowing him to assume control of the subject's body and mind. However, because Jacob Shaw was also a carrier of the X-Gene, Mr. Sinister took the liberty to perform this same operation on his son, Sebastian, without his father's consent. Still, Jacob was a cautious man, suspicious that his employer would lay a claim on his son's life. To prevent Mr. Sinister from one day overtaking Sebastian, Jacob stole his employer's notes and reverse-engineered a machine that would protect Sebastian, as long as it were nearby and active. He made Sebastian promise to always keep this mysterious machine in his vicinity. [X-Men: Legacy (1st series) #211-214]
Presumably, this violation prompted Jacob to quit working for Dr. Essex. He moved his family to a small town outside of Pittsburgh, Pennsylvania, where he got a job as a miner; in just one generation, the Shaw family had fallen from English nobility to the American working class. When Sebastian Shaw reached the working age, he took a job in a steel mill, and remained an employee there until after he completed high school. In his spare time, Sebastian applied for scholarships so he could attend college. He finally got a full scholarship to the Stevens Institute to study engineering. Soon after he received the news, however, his father Jacob took ill and died, leaving Sebastian completely on his own. Still, Sebastian kept the promise he made to his father, and kept the mysterious machine bequeathed to him nearby at all times.
Despite the untimely death of his father, Sebastian managed to maintain an optimistic outlook on life. He was sharing the exciting news about his school admission with the bartender at a local hangout when group of elitist college students overheard him. They decided to beat up the "poor townie" in order to teach him a lesson about knowing his place in society. To their surprise, their physical attacks not only failed to injure Shaw—they actually made him stronger. Supercharged by the kinetic energy they had inadvertently given him, Shaw fought back and easily defeated them. He may or may not have realized at that point that his newfound ability to absorb and redirect kinetic energy resulted from a mutation in his genetic code. He proceeded in life empowered not only by his convictions, but also by his apparent invincibility.
Shaw attended the Stevens Institute that fall. Unlike his peers who took college for granted, Shaw saw it as a gift and studied relentlessly, rising to the top of his class. Upon graduating magna cum laude, Shaw became a highly coveted engineer and business consultant. His knowledge of technology and economics made him a much sought-after commodity in the for-profit world. He established Shaw Industries, making his first million by the time he was thirty, and his first billion by the time he was forty. Along the way, he also met—and fell in love with—Lourdes Chantal, a fellow mutant with the power of teleportation. Incidentally, Lourdes was a member of the Hellfire Club, to which Shaw's ancestors had belonged. When Shaw's formidable reputation attracted the attention of the Hellfire Club's exclusive Council of the Chosen, they recruited him as a member. [X-Men: Hellfire Club #4]
Once inside the Club, Shaw began attracting a group of closely trusted peers and associates, among them Harry Leland, Emma Frost, Donald Pierce, and the mysterious Tessa. Shaw realized at some point that he was a mutant and, although he kept this a closely guarded secret, he began discretely attracting allies with superhuman powers comparable to his own. Leland, a lawyer, was also a mutant like Shaw, only his ability allowed him to alter mass. Emma was a powerful telepath, and Shaw met her when she auditioned to be a dancer in the club. After Shaw and Leland supported her in building her own business, she became one of his most loyal allies. [New X-Men (1st series) #139] Donald Pierce, however, was a baseline human whose body was mangled during a failed coup in Albania involving the mutant Cable. Shaw developed the cybernetic limbs that restored him to full mobility. For that, Pierce remained in his debt. [Cable (1st series) #49, X-Men: Hellfire Club #4] Finally, Shaw met Tessa, a mysterious mutant girl with a mind like a computer, when she saved his life in Afghanistan. Tessa came to work for him shortly thereafter. [X-Treme X-Men (1st series) #44, Uncanny X-Men (1st series) #454] Although many members of the Hellfire Club were mutants, they kept their mutant status hidden from the rest of the world, even from others within the Club.
Shaw soon rose to prominence within the Hellfire Club. Through the Club, Sebastian made many powerful friends, among them Warren Worthington Jr., Howard and Tony Stark, John Braddock, Norman Osborn, and Senator Robert Kelly. Sebastian even introduced Senator Kelly to a Hellfire Club server named Sharon, who later became Kelly's wife. The Club embodied more than just wealth and power, though. It encouraged enjoying the finer things in life, including things that would arouse scorn and judgment elsewhere. In keeping with its unofficial motto of "doing as thou wilt but harming none," its members were free to engage in whatever consensual debauchery suited them. No sexual act was taboo at the Hellfire Club; some of the rooms even had two-way windows so patrons could observe others in the act. The servants wore risque clothes, the booze flowed freely, and the luxury of the lavish dinners and parties had no limits. [Uncanny X-Men Annual (2nd series) #2, Uncanny X-Men (1st series) #246]
Shaw took lovers other than Lourdes. At some point, a woman with whom both he and Harry Leland had a sexual relationship reared a child, whom she named Shinobi. Despite—or perhaps deliberately oblivious to—questions about the boy's paternity, Shaw claimed Shinobi and raised him as his own. (Indeed, it seems as if Sebastian never even informed his friend Leland about the boy's existence.) Shinobi did not live up to his father's harsh expectations, however—something Shaw made quite clear. He constantly belittled Shinobi for being weak and wispy, and did not refrain from exercising corporal punishment to "correct" the boy's unimpressive behavior. [X-Men (2nd series) #29, Marauders (1st series) #26]
Shaw also began collaborating with the Club's White King, Edward Buckman, on a venture they deemed Project: Armageddon. Sensing the immense profit potential possessed by the mutant gene, Shaw entered into this project with the intent to gain an understanding of the X-Gene and bring it under their control by capturing and studying the X-Men. As the sole holders of the X-Gene, they would have not only the raw power it granted, but also the ability to exploit the mutant genome in the marketplace. [Classic X-Men #7, X-Men: Hellfire Club #4]
Despite the additional success it allowed him, Shaw's membership within the Hellfire Club disturbed his lover, Lourdes. A member of the Club well before Shaw, she feared its influence would corrupt him. She especially distrusted Edward Buckman, the Hellfire Club's White King. She was convinced Ned somehow intended to exterminate all mutants. Shaw refused to consider her doubts about Ned. He made an effort to quell any concerns Lourdes had by proposing to her on Christmas. Lourdes accepted the proposal and the two enjoyed that holiday season seemingly deep in love. [X-Men: Hellfire Club #4] In fact, Sebastian had become increasingly abusive towards Lourdes. The stress of his position led him to lash out at her, and her love for him soured over time. Despite the fear she felt towards him (or because of it), Lourdes did not believe she could leave Sebastian. [Marauders (1st series) #22]
As it turned out, Shaw should have listened to Lourdes; Project: Armageddon was indeed Ned Buckman's underhanded attempt to rid the world of mutants, not exploit them. Ned had rebuilt Bolivar Trask's Sentinels—albeit as second-tier copies—and programmed them to exterminate all carriers of the X-gene, including Shaw and his colleagues, whose secret he somehow knew. On New Year's Eve, at the same moment Emma Frost was telepathically relaying to Shaw the truth she had uncovered about Project: Armageddon, a group of Sentinels ambushed her and Harry Leland. Shaw forced Lourdes to teleport himself and Tessa to Emma's aid. They arrived in time to save Emma and Harry, but Sebastian saw Lourdes slain by a Sentinel during the fight when trying to save him. Blaming himself for endangering his fiancé's life, Shaw sought vengeance for Lourdes.
With Harry, Emma, and Tessa at his side, he returned to the Hellfire Club to destroy Ned. During a meeting of the Lords Cardinal, Emma assumed telepathic control of Ned and forced him to murder the Hellfire Club guards, his White Queen, and the rest of the Council. With them dead, Shaw revealed himself and announced to Ned that he uncovered his treacherous plan to rid the world of mutants. He then executed Ned by snapping his neck. With the Council of the Chosen gone, Shaw and his peers assumed control of the Hellfire Club, declaring that mutants would no longer be victims, but rulers. [Classic X-Men #6-7, X-Men: Hellfire Club #4]
As part of his vow to use his power and wealth to protect himself from future attempts on his life, Shaw decided to reactivate the Sentinels from Project: Armageddon and use them for his own purposes. Figuring the Sentinels were a gun that would inevitably be aimed at the head of mutantkind, Shaw at least wanted his finger to be the one holding the trigger. He worked with his cybernetic associate Donald Pierce to develop new and improved Sentinel models. However, these Sentinels would be hardwired from conception with a blindspot that prevented them from detecting Shaw's X-Gene, and those of his chosen associates.
Although Shaw appointed Harry Leland and Donald Pierce as his Black and White Bishops, he was not ready to appoint Emma Frost as his White Queen just yet, despite her extraordinary performance in the Inner Circle coup. Emma, it seemed, was but one of three candidates for the title, along with her two fellow Hellfire Club dancers—and close friends—Rebecca and Anne. Shaw wanted Emma as his Queen, but he also wanted her to earn it. One night after dinner, Shaw whispered in Emma's ear that, to become Queen, she had to choose either Rebecca or Anne to die. Emma said quite frankly she couldn't bring herself to care which one survived. With that, Shaw beat the two women to death with his bare fists before Emma's eyes, brutally securing her position in the coveted role. [Uncanny X-Men (1st series) #531]
While Emma proved to be an extremely valuable asset—as well as a sexual partner—to the Black King, Tessa remained the one he valued most. Her analytical mind often helped tip the odds in Shaw's favor, both literally and figuratively. On one such occasion, she helped him depose of Elias Bogan, one of Shaw's most powerful rivals within the Hellfire Club. A mysterious telepath who never appeared in person, Bogan operated only through proxies. One evening, Shaw challenged one such proxy to a game of poker. If Shaw were to win the hand, Bogan's fortune would be his. Were Shaw to lose, however, he would relinquish to Bogan Emma Frost, his White Queen. Shaw was confident he could win with Tessa's assistance, even though Bogan had never before lost a hand of poker. Shaw's confidence was warranted: thanks to Tessa's help, he won and took Bogan's fortune for his own. Bogan intended to get his revenge and waited patiently, but Shaw did not care. He was now the undisputed ruler of the Hellfire Club's prestigious Inner Circle. In rising to the top of one of the world's most powerful organizations, Shaw had finally achieved true Übermensch status—and he may have remained an untouchable zenith perched above the common herd had he not decided to meddle in the affairs of the other mutants of the world. [X-Treme X-Men (1st series) #41]