In Dark Souls, to be Undead means that the victim has died, but has been reanimated. Most Undead were sent to the Undead Asylum and imprisoned to await the end of the world. Undeath is seen as a curse or a disease by the living.
According to Darkstalker Kaathe, the curse of undeath was created when Gwyn, Lord of Cinder refused to relinquish the Age of Fire to make way for the Age of Dark. How undeath is transmitted is unknown, but it almost always occurs regardless of the victim's intentions. However, some individuals like Solaire of Astora willingly embraced undeath. All those that become undead are burdened with the Darksign.
Unlike the living, the undead do not perish with death; instead, they are resurrected at bonfires. However, in time they gradually lose their sanity and intelligence unless they can procure humanity. Humanity can be used at bonfires to reverse hollowing, but not undeath. An Undead that has fully lost his or her sanity is known as a Hollow.
Hollows are universally hostile to lucid individuals, including other Undead. Unlike other Undead, hollows die permanently when killed.
Another effect of undeath is the gradual decay of the body over time. This effect is reversed when hollowing is reversed.
As a general rule, the undead are treated with hostility by the living. Game lore suggests that Undead are hunted down by followers of Allfather Lloyd in the lands of the living, who round them up and send them to an asylum with no hope of release. Many of the characters the player meets mention the stigma they faced from the rest of society before they left their former homes.