Grace Keefer's son Tony was involved in a robbery at McKay's where he was shot and killed by Officer Mimi Reed. Mimi later married Derek Frye and had baby Danielle with him. Grace, who still blamed Mimi for Tony's death was an aide at Pine Valley Hospital at the time of the birth and kidnapped baby Danielle. Grace had lost her grip on reality and was replacing her son with Mimi's baby. She took Danielle from the nursery and took her home with her where she tried to raise the baby as her own. As her part in the kidnapping was revealed, Grace took the baby to a mountaintop and nearly jumped off a cliff. With Terrence begging her not to jump, she turned the baby over to Terrence, Derek's nephew, and was sentenced to a mental health facility. She was rehabilitated and returned to Pine Valley and became a mother figure to her troubled nephew, Noah. Dimitri Marick had given her a second chance and hired her to be his assistant. Grace is now a counselor at the homeless shelter (Brooke English House) and is an accepted citizen of Pine Valley. She had a major role in the "Cinderella" wedding of Noah and Julia.

In 1999, Grace offered her unsolicited advice to her niece, Belinda, about her relationship with Adrian. Grace knew that Belinda was reaching a point in her life where she wanted to settle down, but Adrian wasn't at the same point in his life.

In 2000, Grace resurfaced and issued Adrian a warning to steer clear of Tina Harding, a young woman who worked at the shelter. Tina had been in foster families for most of her life and Grace feared that Adrian would destroy her by starting and abruptly ending a relationship with her. Adrian assured Grace that he really cared about Tina and Grace backed off of her hard-line stance against the man