Shrek is an ogre created by Dreamworks Research, that massacred a Dreamworks facility and eventually broke out.
Shrek was created by scientists at Dreamworks Research, by the requests of the "higher ups". "Boss" oversaw the experiment, with strict orders to kill anybody who tried to quit or didn't follow orders. One day, Shrek broke free and killed the research team, Boss being the sole survivor after he escaped.
Shrek had broken into Markiplier's house, kidnapping him and taking him to the research facility. Mark, avoiding Shrek in the building, discovered Dreamworks and Shrek's old containment cell. He was kidnapped by Boss, who was killed by Shrek soon after. It is unknown what happened next.
Through unknown means, Shrek escaped the facility and wound up in a swamp. He seemingly tortured and killed people who entered his swamp, judging by the "punishment barrel". He had also killed Donkey.
Markiplier investigated the swamp, collecting onions. Shrek attempted to kill Mark at all costs, but he ended up escaping anyway.