Sensei Terry Silver is a Vietnam veteran and the president of Dynatox Industries, a nuclear waste dumping company. He lives in an extravagant mansion overlooking the Valley. Though never confirmed, other residents of his home seem to include Milos, his butler, Margaret, his personal assistant, Snake, his cabana boy and all around troublemaker, Dennis, a karate expert (although his level of expertise is questionable, as Dennis was easily defeated by Daniel LaRusso), and later "Tournament Terror" Mike Barnes (Karate's Bad Boy) (played by actor Sean Kanan), whom he hires to defeat Daniel LaRusso in the All Valley Tournament. He also keeps around several karate sparring partners, whom he destroys regularly mainly for his own enjoyment, even though he does telegraph his wheel kicks.
Earlier in his life he served in Vietnam under Captain John Kreese (played by actor Martin Kove), who later went on to run Silver's Cobra Kai dojo chain. He was not a capable soldier, and Kreese was responsible for saving his life on more than one occasion. It is probably here that he developed his noticeable racism towards Asians. Even though he has a Japanese-style dojo, calls himself "sensei" and practices karate, he disrespects the culture of the people he learned from. In the movie, Silver uses an excessive amount of anti-Asian racial slur without any obvious reason, even when he's wearing a Japanese karate uniform and imitates the Japanese culture. This extreme opportunistic betrayal is portrayed effectively by the director. He and Kreese then moved to South Korea to train under a karate master there. Silver has also spent a significant amount of time in Tahiti, having a relationship there with a woman known as Mamona.
Silver's cunning and manipulative nature are almost unparalleled. He is fond of bribing district attorneys when he is indicted (usually with their favorite meals), an action which he reveals to Margaret when she is going through his itinerary while he is enjoying a lavish bubble bath and a fine cigar. He later devises a plot to destroy two poor people with high school educations in Los Angeles by planting the seeds of distrust into young LaRusso's mind and almost severing his relationship with Miyagi. This scheme was of such importance to Silver that he informs Margaret to free up his upcomming weeks for "revenge." He uses the help of his henchmen Snake and the mute Dennis, two LA bad boys capable of raising hell on the streets. He convinces Daniel that he can teach him the techniques he needs to win the All Valley Under 18 Karate Tournament (of which Daniel is the defending champion). The truth is that he is teaching him maneuvers that are either unethical, illegal, such as direct punches to the face or kicks to the knee, or completely inneffectual, such as leg sweeps.
Ultimately, Silver's hubris would be his undoing; he revealed his sinister intentions, prompting a reconciliation between Daniel and Miyagi. During the All Valley Karate Tournament, Silver watches his stock in Cobra Kai dive when Barnes is defeated, sparking a huge public backlash. It is assumed that he returned to the radioactive waste dumping industry and continued to randomly beat up sparring partners for his own recreation.