There is a helpful article on Steven Hunter’s blog about the distinction between the terms “Sheol” and “Hades.” If you have read the Bible much, you will be familiar with the term “Sheol” from the Old Testament as the place where the dead are, and the fact that the New Testament generally uses the term “Hades” to refer to the grave. However, even though “Hades” is the term used for “Sheol” by those who translated the Hebrew scriptures into Greek, the two terms are not equivalent:

Since the Old Testament does not treat the underworld as the Greeks did, Sheol cannot be fully understood as Hades regardless of Hades being its corresponding counterpart in the Septuagint any more than heaven should be literally interpreted as Olympus from similar Greco-Latin terms.

You can read the rest of the article here.