Seven or eight years before the series' timeline, Kylie and Malia were in the Tate's car being driven by their mother on the night of a full moon. She had been holding her doll right then. Unforunately, Malia had shapeshifted right then for the first time, the car went off the road into the Preserve and fell into a ravine. Malia had severely mauled her mom and sister, and Kylie and Evelyn died. Malia would then live fully transformed for eight years as a coyote in the wilderness.
Malia would however, remain drawn to the car wreck showing she never forgot about her family in her transformed state. Scott and Stiles discovered the car wreck, and subsequently Malia, and took the her sister's doll.
In her full coyote form, Malia would attempt to track down the doll. Stiles realized she was bringing the doll back to the car wreck for Kylie like leaving flowers to the grave.
Kylie is remembered by Malia with immense guilt because she holds herself accountable for both her and their mom's deaths.
However in A Novel Approach, Malia has a flashback to the night of the accident. It wasn't her full moon transformation that caused the car crash: a woman had fired on the car causing it to go off the road which triggered her transformation. Malia believes the woman was the Desert Wolf, her biological mother.