Larry McDermott, an old boyfriend of Frannie Hughes, came to Oakdale after accepting a job at Memorial Hospital. Though he hoped to rekindle their relationship, a torn Frannie chose to marry another man instead. In the meantime, Larry briefly dated the older, and recently widowed, Lyla Peretti. However, Lyla quickly called it off when she noticed that he still had some lingering feelings for Frannie and also because his father, L.J., was a real lout in Lyla's opinion. L.J. was not a father-in-law you'd want to have. Dejected, Larry put all of his energies into working at Memorial where an unlikely woman caught his eye—Susan Stewart. Though Susan was uneasy about the relationship since she was close to twenty years older than he was, Larry assured her that her age made no difference to him and the two began dating. After supporting Susan when she underwent a biopsy, Larry proposed. Though she was reluctant at first, when Larry rescued her, Frannie and Bob Hughes when they were held captive in Montega, she relented and the pair married on the spot.

Happy in his new life, Larry reassured Susan that it didn't matter to him that she could no longer have children. Despite his reassurances, she still felt guilty and so her daughter, Emily, volunteered to donate one of her eggs which would be fertilized by Larry and implanted into Susan. The procedure was a success and Susan gave birth to a baby girl whom they named Alison. Though Larry and Susan had some problems due to Larry permitting Emily to have an almost motherly relationship with Alison, the couple was devoted to making their marriage work.

Soon after, Larry got a taste of power when he became Acting Chief of Staff at Memorial after Bob temporarily stepped down. Tired of being pushed around, especially by Dr. John Dixon, Larry developed a very autocratic attitude. Liking the power he had, Larry accepted a better job in Chicago and made plans for Susan and Alison to come with him. Unfortunately thanks to Emily, Susan's job offer in Chicago fell through and she was forced to stay at Memorial. Though Larry and Susan tried to maintain a long distance relationship, it didn't work out and Susan filed for divorce when she saw Larry sleeping with another woman. With the dissolution of his marriage, Larry failed to maintain a relationship with Alison and, from the time she was a teenager, Alison went by the last name of Stewart.

Years later, Alison's friend, Hunter, decided to surprise Alison by inviting her father when Alison was honored with a nursing student award. Larry's unexpected appearance at the dinner shocked Emily, Alison, and Susan. Despite Alison's initial reaction, which was to tell her father that she didn't want to talk to him, Alison relented and let Larry try to explain his years of absence from her life. Meanwhile, several weeks later, Emily confronted Larry when she learned that the eggs she had harvested before Alison was born were missing. Despite the fact that Larry's signature was on the transfer request, Larry denied knowing anything about the transferred eggs. However, it was soon discovered that Larry was lying. Apparently when he and Susan were still married, he embarked on an affair with a woman named Aurora Hunter. Since Aurora desperately wanted a child, Larry used one of Emily's harvested eggs to grant her her wish. Hence, Alison's friend, Hunter, was actually her brother! With this startling revelation, a shamed Larry departed Oakdale.