Shamsher Bahadur was the son of Peshwa Bajirao and his second wife Mastani .The origin of Mastani is shrouded in obscurity. Tradition makes her the offspring of a Hindu father probably Maharaja Chattrasal and a Muhammadan mother. Some consider her the daughter of the Nizam, while others refer to her as a courtesan of the court of some Muslim chief . Tarikh-i-Muhammadshahi mentions that “she was a Kanchani (a dancing girl) skilled in riding and handling the sword and spear. She always accompanied Baji rao in his campaigns and rode stirrup to stirrup with him” . The first mention of her name in authentic papers occurs in the accounts of the marriage ceremony of Bajirao's eldest son Balajirao which took place on 11th January 1730. In the same year Bajirao built his Shaniwar palace in Poona and later added to it a portion named after Mastani , Mastani Mahal (shaniwarwada's north-east corner) and had its own external doorway called Mastani darwaza.
In 1734 she bore him a son who was named Krishnarao . But the brahmins of Poona refused to conduct the thread ceremony of Krishnarao , him being born from of a muslim woman. As a result the boy was brought up as a Muslim, by name Shamsher Bahadur. His mother and father both died in the year 1740 . But before his death Bajirao gave few districts of Bundelkhand to Shamsher Bahadur as his jagir yielding 33 lakhs , which he himself had got as present from Maharaja Chattrasal . Shamsher Bahadur made Banda his chief town of residence and loyally served his half –brother Peshwa Balajirao . Shamsher bahadur was married to Mehrambai (or Lal Kunwar), the daughter of Lakshadhir Dalpatrai . A son was born to the couple in the year 1758 and he was named Krishna Singh alias Ali Bahadur. The descendents of Shamsher Bahadur later assumed the title of Nawab of Banda .
Shamsher Bahadur not only managed the affairs of Bundelkhand but also served the Peshwa in his campaigns against the Nizam . On 20th November , 1751 in a stiff action with the Nizam near Parner (Ahmednagar District) Shamsher Bahadur's mare was wounded with a spear . Shamsher Bahadur also conducted land operations against Tulaji Angre in 1756 during the Vijayadurg campaign .Shamsher Bahadur also accompanied Raghunathrao in his first campaign to north in 1753 . Sahmsher Bahadur along with Yashwantrao Pawar was dispatched to help the Sindhias in Marwad on 29th September , 1755 from Pune with an army of ten thousand . These two Maratha chiefs arrived bit late and joined Dattaji (21st April 1756) in the siege of Rupnagar in Rajputana after the Sindhias had ended their Marwar campaign . Bahadur Singh of Rupnagar State, submitted to the Marathas and yielded the city to his elder brother Samant Singh, whom he had ousted and whose cause had been taken up by Ram Singh and the Marathas. On reaching Kota , they besieged the fort and placed Ajitsingh on the throne.
In 1757 when Antaji was pushed to Mathura by Abdali’s men he requested the Maratha chiefs of Bundelkhand like Naro Shankar and Shamsher Bahadur to unite and drive off Abdali but he received no positive response .When Raghunathrao came to north India Shamsher Bahadur joined him in Rajputana, towards the end of July Raghunathrao began his march upon Delhi . Shamsher Bahadur with the artillery and the advanced division reached Rewari on 27th July . He was ordered to make a base at this city and occupy the Mughal possessions in the district around . Prince Ali Jah (the Emperor's second son), who had come a few days earlier to Rewari for wresting the district from the hands of usurpers, was made prisoner on 30th July by Shamsher Bahadur. Raghunathrao and Malharrao towards the end of July, reached Rewari and together they marched to Delhi . Where the Marathas ousted the domination of Najib Khan and restored Imad-ul-Mulkh to power .
In 1758 Raja Hindupat of Panna ,( Bundelkhand) got his brother Amansingh murdered, usurped the throne of Panna and banished his younger brother Khetsingh .On 1st July 1758 Shamsher Bahadur and Govind Pant went to meet Hindupat . Due to the efforts of these Maratha chiefs some portion of the kingdom of Panna was given to Khetsingh and Hindupat agreed to present 5 lakhs and one thousand to peshwa within three years and to finance the Maratha armies in his territories .Peshwa acknowledged Raja Hindupat as the King of Panna and Shamsher Bahadur after making necessary arrangements at Kehciwada left for Puna on 3rd August 1758.
During the campaign of Panipat Shamsher Bahadur accompanied the Maratha armies to north with his 3,000 horsemen . In the finale battle of Panipat Shamsher Bahadur was positioned in the right wing of Marathas , when Viswasrao fell by the bullet shot Shamsher Bahadur rushed into Maratha centre and joined Bhausaheb in his finale combat .When Shah Pasand Khan left his position on the imperial road of Panipat , Shamsher Bahadur had every opportunity to abandon the battle field and escape unhurt but instead he chose to join the action in the Maratha centre . The author of Bhausaheb’s Bakhar mentions that Bhausaheb took Shamsher Bahadur along with him and entered the mele killing many Afghans. In the end Shamsher Bahadur managed to reach Kumbher in a highly wounded condition where he was hospitably received by Jat King Surajmal , but he died of his wounds. Probably when he would have been separated from Bhausaheb in the crowd of Afghans and his only option would have been a retreat southwards . It is said that he died crying “Where will i go now ? To whom will i show my face now .... Bhau ! Bhau !” .