"Who is walking with her?"
Translation:Wer geht mit ihr?
Because "sie" is nominative (it is the subject of the sentence) and "ihr" is (in your example) dative (it shows the indirect object of the sentence).
The prepositions aus, außer, bei, entgegen, mit, nach, seit, von, zu, and gegenüber require dative case. So when "mit" refers to "her" then you use the dative pronoun "ihr" instead of the nominative pronounce "sie".
It sounds difficult, but we do the same in English. "Who is walking with she?" is also wrong, and "Who is walking with her?" is correct. Note that sie/she and ihr/her are cognate.