Can't get along with my sister?

My sister always makes a mountain out of a molehill and then picks on me until she's emotionally destroyed me. Usually it's no longer about the argument itself, but about her personal issues. She brings up past events. Connects the argument with things that have nothing to do with it. Then she presents everything as something other than it is and twists everything you say around so that you come across as the bad guy. Most of the time I try not to argue any further and let it go, or I withdraw from the situation when I notice she's not going to stop. That infuriates her even more. My mother often gets involved to mediate and then tells her to let it go. If I notice she's got a problem again or is getting angry again, I try to keep the situation harmonious as best I can and keep my mouth shut. But I can't put up with all of this anymore. I'm seriously considering cutting off all contact with her for the long term. I'm constantly walking on eggshells. My father has the same personality trait and it's made our entire family life hell. My mother put up with it all and was patient. My sister doesn't acknowledge her mistakes and thinks she's in the right. Unfortunately, she's always been my main focus, we've always been close, and we share most of our friends, which is why we're always together or argue. But it keeps me small and behind in life, and we're both adults. Slowly but surely, I'm becoming disgusted by her personality. I just don't find her an unpleasant person. What should I do?