Phoebe Forrester was born in September 1999 to Taylor and Ridge Forrester. She was born a few minutes after her identical twin sister, Steffy. Her mother suffered from tuberculosis during the pregnancy, and barely survived. Luckily, both mother and children came through it perfectly well. The baby girls were named Stephanie (after Ridge's mother Stephanie) and Phoebe, which means "shining light." They also had an older brother, Thomas, who was about two years old at that point. Phoebe grew up quite fast, and in February 2001, when she was about two years old, she, along with her family, went on a trip to St. Thomas where her parents renewed their wedding vows. A few days after the ceremony, the entire family, along with their baby sitter Catherine went on a boat trip. The weather got really rough, and Phoebe's twin Steffy fell overboard and was eaten by a shark.

After a while, Phoebe was very confused when Steffy never showed up, and began asking where her sister had gone. Everyone told her she had gone to heaven, but Phoebe didn't believe much in that. And it turned out she was right. Steffy wasn't dead at all. She had been kidnapped by crazy Morgan DeWitt. Luckily, her father Ridge discovered it at last, and drove his car straight in to Morgan's house, where both Taylor and Steffy were being held prisoner. The family was reunited again, and everyone was happy until Taylor was shot and killed by Sheila Carter.

Phoebe was seldom seen and eventually went away to school in Europe with her sister, Steffy. She came home from studying in London, Steffy having decided to stay behind. She soon found herself in the midst of a nightmare when her car broke down on the side of the road the night of Alexandria's birthday, and was horrified when Darla, who had come to help her, was hit by a car driven by Taylor, who was also coming to help her. Phoebe couldn't handle the thought of losing her mother, so Taylor and Hector opted to remain silent to protect Phoebe. Eventually the truth came out, but by then Phoebe had met up with Shane McGrath, a young man who had witnessed the accident. Taylor got off, and Phoebe began to see Shane for awhile, but was soon distracted by the arrival of Rick Forrester. After walking out on Shane one night when he took her out for an expensive dinner she didn't look back, and set her sights on a future with Rick.