Bailey grew up in Pittsburgh, Pennsylvania as part of a musical family. She started playing the guitar at 13. At first she was primarily interested in rock music and after a few years she heard Wes Montgomery play on the radio and discovered jazz.

She attended Berklee College of Music in Boston. After college, she taught music in Baltimore before moving to New York City in 1988 to further her career as a performer. She is currently an Associate Professor of Guitar at Berklee. She released her first album, Little Misunderstood in 1995. It featured musicians George Colligan, Vince Loving, and Chris Battistone.

In 2001, Bailey released Reunion of Souls with guitarist Chris Bergson, featuring Ashley Turner and Sunny Jain. This was followed by The Power of 3! in 2002 which contained eight tracks all written by Bailey. Allmusic's Rick Anderson said that each track was "a gem" and "more complex than you'd guess at first listen". Overall he said the album was "highly recommended". Her next album was 2004's Bull's Eye. In 2006, Bailey released her fifth album Live @ the Fat Cat and was a headline act at the Pittsburgh Jazz Festival.

Her sixth album, A New Promise, was released by MCG Jazz February 2, 2010. Phillip Booth from Downbeat calls Sheryl "one of the new greats of her chosen instrument." In 2011 Sheryl followed up with a release from her quartet, featuring pianist Jim Ridl, "For All Those Living." It charted for several weeks in the JazzWeek Top 10 and is in rotation on Sirius XM and the Comcast Music Choice network.

Look for a return to the Sheryl Bailey 3 format in late 2013, with organist Ron Oswanski on drummer Ian Froman for an upcoming release "A Meeting of Minds." This band has been in residency at NYC's 55 Bar for over 10 years and has developed a deep musical telepathy that they bring to their faithful audiences with each performance.

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