Sherman, a social worker, served as the director of EMILY's list, the director of Maryland's office of child welfare, and the founding president of the Fannie Mae Foundation. During the Clinton administration, she served as Counselor of the United States Department of State from 1997 to 2001. She was also a Special Advisor to President Bill Clinton and Secretary of State Madeleine Albright and North Korea Policy Coordinator. In the latter role, she was instrumental in negotiations related to North Korea's nuclear weapon and ballistic missile programs.
She served under Hillary Clinton and John Kerry as Under Secretary of State for Political Affairs from 2011 to 2015. She was the fourth-ranking official in the US Department of State. In that role, Sherman was the lead negotiator for the Iran nuclear deal. On January 16, 2021, President-elect Joe Biden formally announced Sherman to serve as United States Deputy Secretary of State under Antony Blinken. On March 11, 2021, her nomination was reported out of the Senate Foreign Relations Committee. Her nomination was approved by the full Senate on April 13, 2021, by a vote of 56 to 42. She is the first woman to hold the position. She was sworn into office on April 14, 2021.
On September 21, 2011, she was appointed to the position of Under Secretary of State for Political Affairs by Secretary Hillary Clinton. In this capacity, Sherman has led the US team during six negotiating rounds between Iran and six world powers about Tehran's nuclear program.
In this position, she was the fourth-highest ranking member of the Department.
She was named part of a special task force by Secretary of State Hillary Clinton to implement recommendations to improve protections for Foreign Service personnel, as a result of the 2012 Benghazi attack.
Sherman was critical of Benjamin Netanyahu's commitment towards a two-state solution, suggesting it could impact the United State's veto policy surrounding related resolutions at the United Nations.
She was criticized by human rights organizations, including Amnesty International for praising Ethiopia for "strengthening its democracy" in wake of the 2015 elections - citing democratic backsliding and suppression of human rights.
She played a role in negotiating the details behind the Syria peace talks of 2016.
Under Secretary Sherman met with Yossi Cohen, National Security Advisor to the Prime Minister of Israel, at the US Department of State in Washington DC on February 18, 2015.
In October 2013, before negotiations began in Geneva between Iran and the so-called "P5+1," she made a comment about the Iranian negotiating strategy in a Senate committee hearing. She said, "We know that deception is part of the DNA." This caused her some trouble when a number of Iranian officials, including some members of the country's parliament, asked her to apologize. She served as the lead negotiator for the United States in the agreement reached with Iran on July 14, 2015 in Vienna.
On February 27, 2015, Sherman told a conference at Carnegie Endowment for International Peace, "The Koreans and Chinese have quarreled with Tokyo over so-called comfort women from World War II. There are disagreements about the content of history books and even the names given to various bodies of water. All this is understandable, but it can also be frustrating."
She continued, "Of course, nationalist feelings can still be exploited, and it's not hard for a political leader anywhere to earn cheap applause by vilifying a former enemy. But such provocations produce paralysis, not progress." Her comments were condemned by South Korea, but an analyst at the Asan Institute for Policy Studies said the reaction to Ms Sherman's remarks seemed excessive, and that her comments were in line with US policy.
