Baba Yaga was one of the powerful creatures that were targeted by the Boxing League. She managed to elude them until they managed to make her vulnerable by transporting her hut away, and was finally captured. Less than 50 years later she swore loyalty to the Empire in exchange for her freedom.
Disguised as Red Riding Hood, she travelled into the mundane world and arrived at Fabletown. She claimed to have escaped the Adversary, taking on the role of Red Riding Hood, but was in fact sent to spy and led an invasion.
During the Invasion of the Wooden Soldiers, she tricked Boy Blue and seduced him to learn more about the status of Fabletown. After he voiced suspicions on her true identity, she revealed that she was not Red Riding Hood, and then had Blue tortured and beaten for answers. Once he proved useless, she made the wooden soldiers drop Blue at the Business Office as a message.
During the battle itself, she was lured by Frau Totenkinder, who knew her true identity, into a trap. Baba Yaga claimed that Frau Totenkinder was weaker than her, that she was never in her league. However, she was defeated as Frau had weaved powerful spells preparing for this moment.
While Baba Yaga survived her fight with Totenkinder, she was in very bad shape. A body, said to be hers, was thrown down the witching well to assure the Fables that she is no longer a threat. A select few, however, know that Bigby has her imprisoned and that Totenkinder is interrogating her for information on the Adversary.
She stayed imprisoned in the Business Office until the release of Mister Dark resulted in the Office being struck by his spell of Unbinding. This spell both cut Baba Yaga off from Frau Totenkinder (who had been draining away Baba Yaga's magic every morning) and destroyed the spells keeping her imprisoned.
Her powers quickly returning, Baba Yaga prowled the near-infinite depths of the Business Office for some time, eventually recovering ancient tools of her power that she had thought lost in the Empire: her broom, mortar, and pestle. However, even with this increase to her power and the aid of her newly-resurrected Knights, she was unable to find a way to escape the Business Office.
She ran afoul of Bufkin, who hatched a plan with various other denizens of the Business Office to slay the witch. After several failed attempts, she grew enraged and began to summon a mist of death that would wash through the Office and kill any living creature not standing within her own circle of protection. However, before she could complete the spell, Bufkin's followers attacked her and distracted her while Bufkin beheaded the witch with the Vorpal Sword.
Her current status is unknown, though it's entirely possible she's not permanently dead. She has not, however, returned to life as of yet.
- "The Letter" - Chapter Five of "March of the Wooden Soldiers"