The G-Virus was one of the pinnacle's of Umbrella's creations and the pet project of Dr. William Birkin. It could cause significant changes to any host it infected and therefore at the time of its creation was seen as the ultimate bio-weapon.
The virus was discovered by William and his co-partner, Albert Wesker, while they were working in the Arklay Mountains Research facility. Together they had implanted Lisa Trevor the Nemesis Alpha Parasite, who seemed to have successfully bonded to the parasite. Intrigued, the duo performed more tests on Lisa before finally discovering the G-Virus.
Birkin opened up his own research facility beneath Raccoon City and started work on refining the G-Virus. Scared that Birkin might betray them, Umbrella sent in a task force to recover the virus. When the task force encountered Birkin, they shot him and also broke some samples of the virus. This ultimately led to the outbreak.