Lyla Crawford studied nursing Northwestern University, where she had a whirlwind affair with a medical student named John Dixon. John and Lyla had an affair that would produce a daughter, Margo. However, before Lyla learned she was pregnant, she met Bart Montgomery. Bart was running for the Governorship of Iowa and Lyla, who at that time was interested in prestige and money, got her head turned and broke things off with John and agreed to marry who she thought would be the next governor of Iowa, Bart Montgomery. Unfortunately Bart would end up losing the election and would be relegated to being a traveling salesman. Lyla would have two more children, Craig and Cricket, and would eventually divorce Bart, who continually threatened her over Margo’s true parentage. Lyla's daughters were puzzled over their parents' divorce while Margo felt her father had never loved her.
Lyla made her way to Oakdale in 1980, with daughters Margo and Cricket. Cricket babysat for Bob Hughes's daughter, Frannie, leading to a relationship between their parents. Also, in town was John Dixon, who began giving Lyla a hard time for seeing Bob, since she packaged herself as far more wholesome than the wilder woman John once knew. Meanwhile, Lyla had her share of problems with Cricket, who was following in her unruly footsteps, and Margo, who clashed with John over his treatment of her mother. When Margo asked why he treated Lyla so badly, John suggested that she ask Lyla herself. Lyla told her to stay away from John. When Lyla confided in Bob that Bart left her because of her past mistakes, Bob assured her everyone made mistakes.
In the meantime, Lyla's younger sister Maggie, became embroiled in John's trial for raping his wife Dee Stewart, going so far as to represent him. Lyla learned she would have to testify since she was on duty the night they brought Dee in. She stole a gun from John in fear of him threatening her, but returned it when he threatened to reveal their affair since he was certain that Bob would not approve. Around this time, she and Bob were engaged. Lyla shocked the courtroom by admitting uncertainty as to whether or not Dee had been raped. John swore to Maggie he had never met Lyla before that night at Memorial. Tom learned the two had went to Northwestern as the same time. Meanwhile, Bart approached Tom with the news that Margo wasn't his daughter. After Bart agreed to testify, Tom asked Bob to attend trial. Bart's appearance in court shocked Lyla. Bart testified Lyla had seen another man during their marriage. When Tom asked him to point the man out, Bart pointed to John. Lyla swore to Bob that she never loved John, she only kept the affair secret because she thought Bob wouldn't want her. Lyla sadly returned his ring when he said he didn't know how he felt. Recalled to the stand, Lyla admitted the affair. When Margo screamed, "Tell me who my father is!", a sobbing Lyla screamed, "John Dixon!"
In 1982, Cricket gave birth to a son in her own home, and Lyla gained another addition to the family when Craig returned from Martinique. As Tom left Lyla's sister to date Lyla's daughter, she stood by Margo. Lyla sympathized with Craig's problematic marriage to Betsy Stewart, but saw her son's evil when he hid his stepdaughter Danielle away. Lyla tracked her down, returned her to Betsy, and was so angry that she refused to attend Craig's trial.
Lyla began seriously dating Frank Andropoulos, just as he became attracted to Maggie, who was representing him. After a sexual encounter with Maggie in New York, he told a furious Lyla that he was in love with her sister. Maggie initially stayed away for her sister's sake, but they eventually reunited, with Steve and a forgiving Lyla standing up for them at their Christmas Eve 1984 wedding. In 1985, Lyla and John began growing closer again, but due to the presence of his young "maid" Shannon O'Hara, Lyla decided she wanted him out of her life permanently.
In 1986, young Casey Peretti arrived, boarding at Lyla's. A resident at Memorial, he pursued Frannie Hughes, with Lyla's encouragement. At the same time, Lyla began singing at the Mona Lisa. By holiday time, Casey and Lyla were in love.
In 1987, Lyla helped in the mystery surrounding Bob and Kim's presumed-dead daughter, Sabrina. In the meantime, after a tirade from John, she became increasingly concerned about how people viewed her relationship with a younger man. When Casey offered to move out, she accepted. Unable to tolerate their separation, she defied public opinion and asked him to move back. The new presence of his old flame, Dr. Taylor Baldwin, fanned Lyla's insecurities and led Casey to keep his and Lyla's relationship a secret. Taylor found out and did her best to worm into Casey's life. When he confronted her over her behavior, they passionately kissed. Taylor wasted no time telling Lyla. Lyla told Casey to choose. Casey did by proposing to Lyla in a hospital linen closet, but she was hesitant. He continued the barrage of proposals, almost causing her to give in until she learned he'd once proposed to Taylor. Casey moved out of the house.
Casey brought Lyla a single rose during a Mona Lisa performance. Lyla mused over the offer of a gig and possible recording contract in New York from Heather Dalton's former manager, Otis. Casey and Margo thought she was running away from her future, but she accepted the offer. Casey made dinner for Taylor, drinking heavily and dozing off next to her. Realizing what he'd almost lost, he flew to New York with Tom and Margo to see Lyla's opening night. The duo toured the city, and she finally accepted his marriage proposal. With Tom and Margo as best man and matron of honor, Lyla and Casey were married in the hospital chapel with Casey's whole family from Boston in attendance.
In 1988, despite Casey's protests, Lyla went to Greece to check on Margo in her search for a missing Craig. She learned Margo was safe, and Craig was being held by a Greek criminal who offered to give Craig up in exchange for another hostage. Margo volunteered, but Casey stepped in to take her place. With Casey's help, Craig escaped and contacted his mother and sister. Margo gave birth to she and Hal's son, and Lyla's grandson, Adam, on the island of Livia, Greece.
In 1989, Lyla and Casey were expecting a child. Lyla was incredibly happy, staying with Casey's parents in Boston as they cared for her. Their joy came to an end when Casey began experiencing numbness in his arm and other strange symptoms. He asked John to take him off the work roster, and soon collapsed in the cafeteria. Tests led to a diagnosis of Guillain-Barre syndrome, a disorder of the nervous system. The paralysis soon spread to his neck. Casey knew his life would be endangered if the paralysis spread to his respiratory system, but sensations in his hand were encouraging. When Lyla's water broke, Casey checked himself into her Boston hospital. Lyla gave birth to a girl, a daughter named Kathryn Ann, Katie for short.
In 1990, a worsening Casey was confined to a wheelchair, helpless and unable to feed or bathe himself. He gave away his surgical instruments and set up a trust for Katie, asking Tom and Margo to be her guardians, but his spirits lifted when he guided Duke Kramer during an emergency tracheotomy. He was thrilled to be offered a position teaching at the local medical school, but began having difficulty swallowing. He had encephalitis, and would quickly slip into a coma. Casey wanted a living will, but asked Margo to keep it a secret from Lyla. A conversation between them was accidentally caught on a tape recorder. As doctors ordered a respirator, Casey begged Margo to let him die with dignity. The will wasn't finished yet, but Margo summoned up the courage to fulfill his final plea, ripping the life-support plug from the wall. Meanwhile, John encouraged Casey's parents and Lyla to honor Casey's request, but Lyla said she could never do that. Then they received news of his death. Lyla wondered why his respirator was unplugged.
Margo admitted to disconnecting the respirator, causing a bitter rift between mother and daughter. When the prosecutor asked Lyla if she condoned her act, Lyla said no. A grand jury was convened to look into possible first-degree murder charges. Just before testimony was to begin, Lyla and Joe Peretti listened to a tape Casey used to record messages to Katie, and heard his conversation with Margo. Lyla visited Casey's grave and told him she wished he'd come to her with his request. Margo found her, telling her he loved her too much to put her in that position. Lyla told the grand jury she couldn't condone her daughter's actions, but after hearing the tape, she forgave her. The grand jury decided not to indict. Margo and Lyla tearfully reconciled, and as the year ended, Lyla contemplated going back to school for a master's degree in rehabilitative medicine.
Later, Lyla briefly dated another younger man--Larry McDermott. However, she soon called it off when she suspected that he still had feelings for his old love, Frannie Hughes. Later, on Christmas 1991, oil millionaire Cal Stricklyn turned his attentions to Lyla, stuffing all sorts of presents for her and Katie under the tree. She was just beginning to get over her husband's death. One of the few bright spots of the year was Margo giving birth to a second child, a boy, and naming him Casey. By spring, Lyla and Cal were growing closer, but she still shied away from his affections, leading him to be seduced by Lucinda Walsh. When Lyla confronted him, he responded by proposing. Lyla accepted. Later, Lyla rented a room to Simone Bordeau, a Navajo girl attending Oakdale University. Her sister, Leslie, was trying to block Cal from claiming sacred tribal land to drill for oil. Appalled by what she considered insensitivity and a lack of morals on Cal's part, Lyla put their wedding plans on hold. By 1993, Cal had satisfied Lyla by eventually settling with the Navajos for their land deal. However, Lyla had decided she needed a new start, and accepted the offer to leave Oakdale to go on a singing tour. After a final visit to Casey's grave, explaining why she had to take this once-in-a-lifetime opportunity and that he'd always be with her, Lyla left town with Katie.
In 1999, Lyla asked Katie (now a grown woman and living in Oakdale) to help her recover from a broken hip, but Margo volunteered instead. Later, Lyla learned Katie had married an illegal alien to keep him from deportation, and visited Oakdale during Christmas 2000. She tried to convince Katie to end the sham marriage, and also visited grandson, Bryant, in jail. When Katie refused to end her marriage, Lyla met with Simon, asking him not to break Katie's heart. She then went back to California.