Nurse Sheila Carter arrived to work at Genoa City Memorial Hospital and immediately fell for the married Dr. Scott Grainger. In order to steal him away from his wife, Lauren, Sheila drugged him, slept with him, and ended up pregnant. At the same time, Lauren also became pregnant by Scott but didn't tell him. When the truth about the father of Sheila's baby came out, Scott felt obligated, divorced Lauren, and married Sheila. Both Sheila and Lauren were due around the same time. Sheila miscarried her baby earlier but kept it a secret. She contacted a black market baby broker and bought a baby boy. She then switched the broker baby for Lauren's baby in the hospital nursery, and passed off Lauren's baby as her own. Sheila's mother, Molly, discovered Sheila's secret and tried to tell all but suffered a stroke, which made her unable to talk. Sheila had Molly hospitalized to keep her away from Lauren and Scott. Eventually Molly told Lauren everything. Sheila tried to kill Lauren at the cabin but accidentally set fire to it instead. Lauren and Molly escaped, but a body was found, which left all to assume that it was Sheila who perished. Unbeknownst to all in Genoa City, Sheila escaped the fire (a meter reader was the one who died).
Sheila fled to Los Angeles, where she took a job as company nurse at reputable design house Forrester Creations. There she met head designer/founder, the wealthy and debonair Eric Forrester, and set her sights on him. She did her best to keep him to herself and keep her past a secret. In order to make sure that Eric didn't reunite with ex-wife Brooke Logan, Sheila tampered with baby Bridget's paternity test to ensure that Ridge turned out to be the father instead of Eric. During the tampering, security guard Mike Guthrie interrupted her and the tubes were mixed up. Sheila completed the test and Ridge discovered that he was the father. Eric and Sheila grew closer, and she even narrowly missed bumping into Eric's long-time family friend, Lauren Fenmore, who was in town for a fashion show.
In order to be a better person for Eric, Sheila began seeing therapist Jay Garvin, who recommended she reconcile the past before moving on. Feeling the need to make amends with Lauren and be forgiven before she could do so, Sheila went to Genoa City to reveal herself to her enemy and apologize. Molly saw her first and convinced her to stay away from Lauren. After hearing Lauren bad-mouth her and spying on her affair with Brad Carlton, Sheila took matters into her own hands. She took pictures of the tryst and returned to L.A. There she had the picture set against a beach background and made into a puzzle. Sheila arrived on Lauren's doorstep, face covered with a veil. Lauren did not take the resurrection too well and almost called the police until Sheila pushed the blackmail angle. She warned Lauren to keep quiet or else Scott would see the pictures. Sheila then returned to L.A. and accepted Eric's marriage proposal.
Eric's first wife, Stephanie, never trusted nor liked Sheila and suspected that there was something Sheila was hiding. She figured that Lauren, also from GC, was the key, but Lauren kept mum. Stephanie kept pressing, so Lauren finally decided to take action when she learned of the upcoming wedding. Brad, who had custody of his daughter, Colleen, to lose if the affair with Lauren came out, went to L.A. to retrieve the pictures. He managed to get them and the doubles from Sheila and returned to GC to reassure Lauren that Sheila was no longer holding anything over them. Lauren visited Sheila the night before the wedding and confronted her enemy. A vicious catfight ensued in which Sheila came close to killing Lauren. Lauren escaped, warning that the second Sheila said "I do." Lauren would expose her. The next morning, Lauren awoke feeling satisfied until she walked into her bathroom to see the photo of her and Brad posted all over, because Sheila had more copies. At the wedding, where the guests wore black because none of the Forresters were fans of the bride, Sheila left Eric at the altar when Lauren stood to expose her. Sheila returned after the guests had left and convinced Eric to marry her.
As the new matriarch of the Forrester family, Sheila relished throwing it in her enemies' faces. Sheila then joined forces with her pal--and enemy of the Forresters--Brooke Logan in Brooke's takeover of Forrester Creations, by telling the Forresters that she was there to keep an eye on Brooke. Her past kept catching up with her in the form of Mike Guthrie, who blackmailed Sheila over the paternity test switch to get himself a new job, plus Lauren was determined to expose Sheila without being implicated. Unbeknownst to Lauren, Scott was dying from a mysterious disease. Sheila found out and revealed herself to the dying man. He forgave her past crimes because he felt that she had changed. Lauren decided Scott would be the key to Sheila's undoing and arranged for Eric to take Sheila on vacation to Catalina Island at the same time she and Scott were going. That way, Scott would run into Sheila in front of Eric and expose her. Unfortunately for Lauren, Scott covered for her and, before his death, swore Lauren to secrecy so long as Sheila behaved herself. Lauren agreed to his dying wish. The tenderness Sheila showed to the "stranger" Scott Grainger moved Eric so much that he canceled divorce plans.
Sheila's therapist, Jay Garvin, soon promised to expose her when he realized that she wasn't going to change. In a heated confrontation with him, she accidentally pushed him off his balcony and he fell to his death. Stephanie then enlisted the aid of shrink Dr. James Warwick, who immediately saw through Sheila's facade and promised to expose her. Sheila was desperate to hold onto Eric because his will left money to heirs and their mothers only, so she schemed to get pregnant. She even seduced Brooke's lawyer/confidant, Connor Davis, in hopes of becoming pregnant. She announced her pregnancy to a shocked Eric who revealed he'd had a vasectomy. In a final plea to placate Eric, Sheila agreed to attend therapy with James. James could not make a breakthrough. Lauren, meanwhile, would no longer be silenced. In a heated confrontation, Sheila attempted to drown Lauren. Lauren escaped and revealed all to James.
Before James could tell the Forresters, Sheila imprisoned him in a secret room in her house, which was formerly Harry Houdini's house. She and Mike held him captive for weeks in various Houdini devices and engaged in a battle of minds with the doctor. She soon found her defenses failing. and she fell for the doctor, who turned on her and exposed her to the Forresters. Feeling trapped, Sheila lured the Forresters, James, and Lauren to the Forrester house and held them at gunpoint. She angrily confronted them for their lack of support in Sheila's quest for simple love. She then swallowed a vial of poison. Sheila survived and was then sent to a sanitarium for her crimes. Months later, Eric and Stephanie visited Sheila to ask her to sign his divorce papers. She surprisingly agreed. Her therapist, Dr. Brian Carey, felt Sheila had made incredible progress. He supported her bid for parole, which the Forresters strenuously opposed. Sheila was eventually paroled and determined to make amends with all she had wronged. Brooke asked Sheila to stay away from her, as she was trying to become close with the Forresters again.
Sheila soon befriended new-to-town Maggie Forrester, who also did not fit in with the Forrester clan. Soon they realized who each other was but continued to remain friends. Brooke's continually pushing Sheila away angered her. When a mysterious note revealing the true paternity of Bridget, and Brooke's implication in the cover-up surfaced, Sheila was suspected of planting it. She claimed innocence. The only person who could back up Brooke's story, Dr. Tracy Peters, was mugged and killed the night before. The Forrester's wrath against Brooke caused her to flee town after a breakdown. During her absence, Sheila felt determined to protect Brooke's children from Stephanie. After learning that Stephanie was after custody of the children, the "old" Sheila resurfaced and secretly poisoned Stephanie with Mercury-laced calcium pills. Stephanie began showing signs of mental instability and eventually broke down. Sheila then had Maggie implicated in the poisoning. During a vicious argument with Maggie, Sheila was accidentally impaled by a fire poker and almost died.
James insisted Sheila recover at his and Maggie's house. There, Sheila set her sights on James. During his separation from Maggie, James became drunk and slept with Sheila. She kept it secret from him until she learned that she was pregnant. He bonded with her because of their child. Sheila gave birth to a baby girl, whom she named Mary after his mother. James, though, had fallen back in love with Maggie and kept up the charade in order to expose Sheila as an unfit mother and gain custody of his child. Sheila was shocked to learn, minutes after their wedding, of his deception and attempted suicide again. She survived, and James began to fall for her again. Maggie teamed up with Lauren Fenmore to drive Sheila over the edge, which included kidnapping her and keeping her hostage in the house from the movie Psycho. Sheila escaped. Maggie realized that James was lost to her and left town. Sheila befriended spunky waitress Amber Moore, who soon landed a job sitting for Rick and Bridget.
Sheila had "won," but jealousy over James's friendship with Stephanie caused Sheila to see red. Her jealousy pushed James to Stephanie, and Sheila was left alone. Determined not to lose custody of her daughter to James and Stephanie, Sheila shot Stephanie and kidnapped Mary from the house. Amber tried to stop her, but Sheila escaped and was last seen driving out of town and humming a lullaby to her daughter.
Sheila returned to L.A. in the summer of 2002, in search of her daughter, Mary, now known as Erica Lovejoy. Erica set her sights on Rick, son of Eric Forrester. Like mother, like daughter? Not! Erica would have loved to have Rick, who was married to Amber, but not using her mother's evil methods. Sheila, on the other hand, paid Lance to drug Amber, so Rick would think she was fooling around on him and dump her, which he did. When Lance wanted to tell Amber the truth, he was murdered by bees, thanks to Sheila dumping them into his window. Sheila was exposed as Erica's mother, so she later kidnapped Amber, then confronted Eric with a gun. Taylor and Brooke walked in on them, and Sheila shot them both. Taylor died of her wounds. Taylor later returned to see Ridge, who was shocked to see that she was alive. Sheila was sent to prison, but escaped.
In 2003, Sheila surfaced again in Puerto Vista, South America, where she kidnapped Ridge. She wanted to hurt Massimo Marone for what she viewed as causing the destruction of her relationship with her daughter, Erica. And she had a secret for him...she had borne his daughter, Diana. Massimo tried to trick Sheila, but it didn't work. She escaped from Massimo to return to the foundry. In the ensuing chaos, Ridge Forrester supposedly ended up losing his life. Sheila had attempted to save him at the last minute, but had supposedly been unsuccessful.
In August 2005, Sheila turned up in Toronto, where she was taking college courses and being tutored by a teaching assistant, who was none other than 24-year-old Scotty Grainger, who was the spitting image of his father.
Scotty disclosed that he'd never been back to Genoa City since he was a toddler, and grew up in boarding schools around the world. But wherever he was, Lauren visited often and kept an apartment nearby. Scotty always wondered why his mother was so secretive, but gave up asking about it back when he was a kid. Not long after Michael returned to Genoa City, Lauren decided it was time to tell Scotty about her impending marriage, but Scotty admitted he'd already met Michael. Lauren felt betrayed, but Michael later reminded her about how she disliked his family secrets. After Lauren left Scotty's, who should walk out of Scotty's bedroom, but Sheila Carter. Sheila, as "Brenda." Sheila gave Scotty an idea for a novel. Unknown to him, the story was of Sheila and his mother, Lauren, but Sheila made Lauren out to be the evildoer who stole Sheila's baby when the opposite was true. Meanwhile, Michael discovered their history, and visited another "Sheila" in a California prison for the criminally insane. That turned out to be "Sugar," who, after drugging and plastic surgery, looked like Sheila and turned herself in after a two month's escape.
In 2005, it was revealed that Taylor had managed to barely pull through after being shot. Sheila was unaware of that, so as far as she was concerned, Taylor was dead, and she was still guilty of attempted murder.
Scotty decided to go to Genoa City for his mother's wedding and moved into the Loft apartment with Kevin. Brenda soon followed and took up residence in the same seedy hotel where Tom Fisher was staying. The evil Tom and "Brenda" hit it off, and joined forces against Michael and Lauren. Scotty visited "Brenda" often to work on their book. Sheila felt free to move about in Genoa City disguised as the dark-haired British-accented "Jennifer." She even ended up saving Gloria's life while she was waitressing a party at the Athletic Club. When Scotty bought his mother a silver pendant, Sheila saw her chance and dipped it in poison. The more Lauren wore it, the more she started getting sick and having hallucinations. The night before their wedding, Lauren awaited Michael to join her for a romantic dinner on the roof. She began hallucinating that Sheila was tormenting her. Sheila was there for real, talking her into jumping off the roof. Michael arrived just in time to save her, though he never saw Sheila. Lauren was admitted to the hospital, where they discovered the poisoning, but "Brenda" talked Tom into stealing the necklace before it could be checked for toxin. The wedding was postponed while Lauren recovered. Michael and Paul figured out it was the necklace, but Sheila managed to get it cleaned and returned to the hospital laundry. Scotty got a book deal for One Stolen Heart, but "Brenda" was livid, intent on getting back at Tom, who knew too much, in addition to Lauren.
Not realizing that Sheila was intent on murder, Tom was conned into joining her plot to get back at Lauren, by planting a bomb on Lauren and Michael's honeymoon yacht. Michael watched in horror from shore as the yacht blew up. Lauren was not found, and was presumed dead. But Tom had rescued Lauren and carried her and Sheila back to a farmhouse in Genoa City where he held them in the basement fallout shelter. Lauren convinced Tom that Sheila was the bad guy, so he contacted Gloria to arrange a deal to turn over Lauren. John overheard the phone call, grabbed his gun, and met Tom in an alley instead. During a struggle, the gun went off, and Tom was killed. John dropped the gun and took off, getting into a car accident, but Ashley arrived in time to witness it. Ashley confessed to the shooting and was arrested, with Michael as her lawyer. The morgue attendant handed over Tom's effects to Kevin, and they included a key to a safety deposit box, which Michael later traced to a bank in Cleveland. Meanwhile Lauren and Sheila fought, and Lauren broke Sheila's ankle. Eventually, realizing Tom was not returning, they joined forces and attempted to escape. As they were almost out, Paul arrived and pulled Lauren to safety while the shelter caved in on Sheila. Sheila was not found in the rubble, but was later seen at a plastic surgeon where she wanted a new face. Michael and Lauren enjoyed a tearful reunion, and everyone in Genoa City was relived she was back among the living. After recovering from the accident, John regained his memory, and confessed to killing Tom. John arranged a plea bargain to get all possible charges dropped against Ashley for her deception, and was sentenced to seven years in prison, where he died.
Paul Williams managed to track Sheila to Argentina in October 2006 and discovered that she had undergone plastic surgery to look like Phyllis Summers, then had killed the plastic surgeon. Paul, later in October, discovered her buying baby things in Genoa City, and followed her to a warehouse where he trapped her in the cell she had constructed with the intention of imprisoning Lauren and stealing her baby, Fen. He made her pose for a death photo at gunpoint and made up DNA samples to convince Lauren and Michael that she was killed when struck by a car in Argentina. Paul also let Phyllis and Nick know. Paul kept her imprisoned there undetected until December, when Michael put a tracking bug on Paul's car and caught Paul delivering her food. Michael picked the lock and was shocked to discover "Phyllis" behind the bars. Paul appeared and tried to convince Michael that it was really Sheila, but it took a cell phone call to the real Phyllis to convince him. Knowing the authorities could never keep her contained, Paul and Michael shared a secret and the dilemma of what to do with her. Meanwhile, Lauren and the real Phyllis were bonding through their pregnancies as Phyllis helped Lauren get through her postpartum depression and anxiety attacks.
Detective Maggie Sullivan and Paul Williams began dating, and in her curiosity about Paul's frequent absence "on a stakeout," she tracked him by his cell phone to the warehouse. Sheila conned her into believing she was Phyllis, Maggie let her loose, then Sheila shot her with her own gun. Paul arrived later and Sheila trapped him in the cell, too, when he rushed to Maggie's aid. Sheila then went to Phyllis', tied her up, waited for Lauren and baby Fen to arrive, and taunted Phyllis about how great it would be to take over Phyllis' life with her hot husband and new baby. After Lauren arrived, Sheila tied her up, and Sheila took Phyllis and babies Fen and Summer to a retirement home where she had an apartment. Michael eventually rescued Paul and a near-death Maggie from the warehouse cell, and they rescued Lauren. While Michael and Paul followed Sheila's walkie-talkie signal, which she planted to lure them elsewhere, Nick and Lauren, with the aid of Kevin, enhanced the background noise from her latest taunting call. Nick realized where they were and, while they tried to find Paul, Lauren sneaked out with the gun Paul had given her for security. Lauren found the apartment, broke in, and confronted the two Phyllises. Phyllis managed to convince Lauren she was the real one, and Lauren shot Sheila dead! Her dying words still taunting Lauren that she would never be rid of Sheila and Lauren had shot the wrong one, led us to believe that this might have yet been another pawn of Sheila, and she might still be out there and a threat. Phyllis was livid with Michael and Lauren for endangering her and her baby, Summer, and refused to reconcile. Maggie recovered from her gunshot wound and did not tell the police about Paul or Michael holding Sheila in that cell, so they were not charged.