Caroline is the previously unknown daughter of Karen Spencer, and the namesake of her aunt, Caroline Spencer Forrester, who died of leukemia in 1990 while married to Ridge Forrester. Caroline lived in New York City until 2012, when Brooke Logan offered her a designing position at Forrester Creations. Brooke wanted to divert her son Rick's personal and professional attention away from ex-wife Amber Moore. While Karen once had a relationship with Thorne Forrester and almost married lawyer Connor Davis before leaving Los Angeles in 1994, the identity of Caroline's father was unknown when she moved to Los Angeles.

The Forresters, Logans, and Spencers warmly welcomed Caroline, and were impressed with Caroline's gentle demeanor and work with the Caroline Spencer Cancer Foundation. Ridge, noticing the similarities between his deceased wife and her niece, was especially moved. Caroline sported a cancer ribbon tattoo on the back of her neck as a way to further memorialize her namesake, who died before she was born.

Brooke encouraged Rick to pursue Caroline, but Thomas was also interested. Caroline gravitated toward Rick, but Amber, who wanted him for herself, duped Caroline into believing Rick was a cross-dresser. Proceeding to explore things with Thomas, Caroline took him to meet her mother, Karen, who had just moved back to Los Angeles. Thomas asked questions about Caroline's father as Caroline pressed Karen to reveal their "family secret." Reluctantly, Karen introduced Thomas to her life partner, Danielle, who was Caroline's second mother. Caroline agreed to keep the truth of her two mothers from opinionated half-uncle Bill, who eventually came to accept Karen and Danielle's relationship.

Caroline and Thomas continued dating and came to the rescue of Marcus Forrester when he was arrested for hitting a man with his car while texting. Upon investigation, Caroline and Thomas found out that Marcus had only hit a pothole, while the man had been struck before Marcus' arrival. Rick made no secret of his continuing interest and arranged for Thomas to work with his former love interest, Hope Logan. Caroline was incensed when Thomas kissed Hope as a publicity stunt. But when Thomas was named interim CEO and got into a scuffle with Rick that ended with Rick crashing through a second-story window, Caroline dumped Thomas and began seeing Rick.

Caroline was surprised when Rick admitted he had deceived his half-sister, Hope, in order to keep her away from Caroline's cousin, Liam Spencer. Caroline understood and told Rick he should tell Hope the truth when he was ready. But then, Caroline overheard Bill and his wife, Katie Logan, arguing about Bill using Hope's father, Deacon Sharpe, to sabotage Hope and Liam's wedding.

Caroline confronted Bill, who menacingly told Caroline to keep quiet. During the argument on Bill's balcony, Caroline tripped and fell over the railing. Caroline maintained Bill's innocence when others suspected him of pushing her. In the hospital, Caroline was pleased when Rick confessed a deeper level of feeling, and later Rick and Caroline won a fashion showdown at Forrester that, with the help of Caroline's designs, installed Rick as president of the company.

The usually demure Caroline showed a new side when Rick took her to volunteer at Dayzee's, a coffee house that aided the homeless. Upset that Rick had changed their more glamorous plans, Caroline turned up her nose at Dayzee's and walked out. Caroline became frustrated when it seemed Rick wanted to spend all his time at Dayzee's. Caroline said she was more comfortable writing checks in her charity work, preferring not to get her hands dirty in the field.

Caroline taunted Rick about his volunteer work and failed to seduce him away from it, even by stripping down to her lingerie. Rick's increasing distance mystified Caroline until Dayzee confessed that Rick had become interested in Maya Avant, a down-on-her-luck actress/singer who had done jail time for a crime she didn't commit. Dayzee shared Caroline's desire to keep Rick and Maya apart. Caroline then confronted Maya and told her to stay away from Rick. Danielle was confused by Caroline's disdain for Maya, but Caroline simply said Danielle and Karen had spoiled her by raising her to appreciate the high life in New York. Caroline made sure to mispronounce Maya's name every time she came up in conversation.

Hoping to discredit Maya in Rick's eyes, Caroline bribed a porn producer to cast Maya in one of his movies. But Maya didn't take the bait, and Caroline wanted a refund. The porn producer refused and snapped a photo when Caroline flirted with porn star Herc. Later, when Forrester secretary Pam Douglas was updating the company's web site, she ran across the picture of Caroline caressing Herc. Not computer savvy, Caroline demanded that Pam delete the image from the Internet.

When Rick made Maya the spokesmodel for Forrester's Hope for the Future line, Caroline tried to make Maya feel insecure, then humiliated herself by running into a clothes rack. Feeling that Rick saw Maya as a charity case, Caroline decided to hold a fundraiser for the Caroline Spencer Cancer Foundation in an attempt to impress Rick. She got Rick, Thomas, Carter, Marcus, and Forrester photographer Oliver Jones to model sleepwear on the runway, and the benefit was a huge success, impressing Rick. But when Rick began wanting to have a serious talk with Caroline, she sidestepped his attempts, admitting she had been a snob and horrible to Maya, though deep down she really loved Rick and wanted to build a future with him.

Caroline admitted to Bill that she knew Rick had repeatedly tried to break up with her, knowing that he wanted Maya. Caroline feared that Maya hid a scandalous secret that would eventually be Rick's downfall.