Deacon Sharpe was brought to Los Angeles by Rick Forrester, whose ex-wife, Amber Moore, was set to marry longtime friend C.J. Garrison. Rick and Amber had been raising Eric Forrester III, a child Deacon fathered with Amber's deceased cousin, Becky Moore; Rick paid Deacon $100,000 in exchange for full custody of Little Eric, hoping it would convince Amber to come back to him. But the slimy Deacon saw that both Rick's family, the Forresters, and C.J.'s family, the Spectras, wanted Little Eric, so Deacon held out and sparked a bidding war between the rich fashion dynasties. In the meantime, Deacon's girlfriend, Carmen was angry that Little Eric was living with them, and jealous of Deacon's growing attraction to Amber, so Carmen threatened to throw the baby off the roof of their apartment building. Deacon and Amber rescued Little Eric, but in the struggle, Carmen fell to her death.
Deacon had been raised by the abusive Daryl, who again beat his son when he came for a visit. Deacon swore to be a better father to Little Eric, and persuaded Amber, who had broken up with C.J., to live with him for four months, after which Deacon promised he would sign over his parental rights to Amber. Although Amber began to bond with the very much in love Deacon, she still had feelings for Rick, and accepted his proposal of marriage. Hurt by Amber's rejection, and angry with the Forresters for demanding that he stay away from her, Deacon took full advantage when he met Rick's sister, the virginal Bridget Forrester. Deacon crashed Amber's wedding and told the Forresters that if he couldn't have Amber, he would take Bridget; her father, Eric Forrester, and her brothers, Ridge and Thorne Forrester, responded by beating Deacon up and throwing him out.
But Deacon turned the tables on the Forresters by whisking the smitten Bridget off to Las Vegas to get married. When the Forresters called demanding that he let Bridget come home, he put the telephone's earpiece in a glass of water and forced Bridget's family to listen in as he deflowered her. Furious, Eric hit Deacon with his car, which only made Bridget more devoted -- until she heard him tell Amber that their marriage was a sham: he really wanted to raise Little Eric (now called “Little D”) with Amber. When Bridget ran off and got into a car accident, Deacon realized he really did have feelings for her. Despite her family's objections, Bridget agreed to take a shot at a real marriage with him.
Bridget's mother, Brooke Logan, begged Deacon to divorce Bridget; Deacon gave in, knowing his lingering feelings for Amber were unfair to his wife. But Brooke and Deacon's emotionally charged conversation led to lovemaking. Deacon was surprised when Bridget responded to his admission of infidelity by giving him another chance, and more so when Brooke gave Deacon a job as the head of Forrester Creations' public relations department. However, Brooke soon took an extended leave from Forrester; Deacon tracked her to a spa, where she admitted she was carrying his child. Deacon and Brooke continued their affair behind Bridget's back, but when Brooke's longtime nemesis, Stephanie Forrester, exposed Brooke's baby bump at a press conference, Forrester employee Whip Jones took responsibility to save her reputation. Deacon enjoyed taunting Whip and sleeping with Brooke on the sly, but ultimately, Brooke became Whip's husband.
Stephanie overheard Deacon and Brooke talking about their affair and demanded that Deacon leave Forrester for Bridget's sake. Believing her mother was carrying Whip's child, Bridget attended Brooke's baby shower; Brooke received a baby monitor but neglected to turn it off, and Bridget heard how her husband had impregnated her mother thanks to the device. Deacon was stunned when Bridget later revealed that she had helped deliver his love child, and understood when Bridget threw him out and burned his clothes. Deacon agreed to Brooke's plea that the paternity of their daughter, Hope, remain a secret, and Deacon left town for a while to keep the truth from being exposed. A few months later, however, a darker Deacon returned, incensed that Brooke was reuniting with her on-again-off-again love, Ridge Forrester; Deacon didn't want Ridge raising Hope.
Deacon blackmailed Brooke into financially supporting him by threatening to expose their affair to Ridge and the Forresters, eventually following her to Portofino, Italy, where Forrester Creations was holding an important fashion show. Ridge punched Deacon when he found him with Brooke, while Eric, who had learned of the affair, convinced Deacon to put some distance between himself and Brooke. But Ridge's biological father, Massimo Marone, didn't want Ridge back with Brooke and talked Deacon into confronting Ridge. As predicted, when Ridge found out that Brooke had had a baby by her own daughter's husband, he left her, but Brooke wasn't interested in resuming her relationship with Deacon.
An ex-boyfriend of Amber's exploited her newfound fame as a Forrester and released a private videotape of their lovemaking, but Amber's twin sister, April Knight, came forward and claimed she was its star. April wanted to be a rock singer, so Deacon changed careers and decided to become her manager. Deacon helped kick off Amber's career; then, in an effort to continue getting his own act together for the sake of his baby daughter, Deacon gave up drinking and joined Alcoholics Anonymous, where he met Macy Alexander. Also a singer, Macy had been presumed dead and wanted to get her career back on track, so Deacon offered his assistance, while Macy encouraged Deacon to pursue his rights regarding his children, Little D and Hope. Deacon and Macy fell in love, but, the night of her big comeback at a club owned by Oscar Marone, gangsters that Oscar owed money to rigged a chandelier to fall on Macy, who lapsed into a coma and was taken off life support off-screen.
Deacon hoped to reunite with Bridget and start a fashion house with her, but when Eric found out, he confronted Deacon; the men struggled over a gun, and Deacon was shot. After he nearly lost the use of his legs, Deacon told Eric he would clear him of all charges connected to the shooting if Eric would make Deacon's new fashion house a subsidiary of Forrester. While digging up dirt on Eric on Massimo's behalf, Deacon became enamored of Massimo's wife, Jackie Marone. Meanwhile, Brooke was set to marry Jackie's son, Nick Marone; Nick asked Deacon if he could adopt Hope, adding that, in exchange, Deacon could see his daughter whenever he wanted. Deacon agreed to Nick's proposal.
The powerful Massimo suspected his wife of cheating and threatened Deacon; after coming to believe in Deacon's innocence, Massimo hired him to learn the identity of the interloper. But it was Deacon himself who was planning a future with Jackie, and, when Massimo found out, he had a stroke that appeared to leave him catatonic. Deacon taunted Massimo, flaunting his affair with Jackie and even drugging her in front of him -- but, though Massimo couldn't move or speak, he was aware of his surroundings and vowed revenge on Deacon. Eventually, Massimo confronted Deacon and Jackie with a gun, but Deacon and Jackie had fallen in love, and she asked for a separation, one of the conditions of which was to install Deacon as vice president of her new fashion house, Jackie M.
Massimo learned that Deacon was a recovering alcoholic, and arranged for Deacon to be tempted so he'd fall off the wagon. Deacon indeed began drinking again, and tried to fight his addiction for Jackie's sake, but when the struggle became too much, he pushed Jackie out of life and left Los Angeles, checking himself into rehab.
Amber had since moved to Genoa City, Wisconsin, and was involved with Daniel Romalotti, an artist. Daniel had been asked to forge a painting on behalf of the FBI, but it was really a ruse by Deacon, who wanted to have Daniel imprisoned so he could have Amber for himself. Deacon told Amber he would make sure Daniel was freed if she slept with him, but after she did, Daniel wanted nothing to do with her. Amber didn't know that Deacon, who was passing himself off as an art entrepreneur, was in town looking for a valuable painting that had been in the possession of Ray Elkins, the one-time cellmate of child abuser Tom Fisher. Deacon was working with Tom's son, Ryder Fisher, to find the artwork; when Elkins was violent toward Ryder the way Tom had been, Ryder killed him. During his search for the painting, Deacon also dallied with art expert Victoria Newman, who slept with Deacon after a fight with her husband.
Daniel became a suspect in the murder of Elkins; Deacon kidnapped Amber and told her he had evidence that would clear Daniel of the charges, which he would turn over if she married him. Amber agreed, but Daniel found out about Ryder's involvement in Elkins' death, and stopped Deacon from marrying Amber by offering to help find the painting. With help from his friends, Daniel located the artwork but returned it to the museum from which it was stolen, and Deacon was jailed for kidnapping Amber and being an accessory to the murder of Elkins. Deacon told Amber that his son, Little D, was living with Amber's mother, Tawny Moore, in Furnace Creek, California -- but not that Deacon had been put up to the whole attempted art heist by Ryder's aunt, Sarah, the supposed sister of nefarious villain Sheila Carter, who had threatened Little D's safety if Deacon didn't go along with her.
After serving his sentence, Deacon planned to return to California, but met Daniel's mother, Phyllis Summers. Phyllis wanted to make her on-again-off-again love, Nick Newman, jealous, so she kissed Deacon, who had taken a job as a bartender at Genoa City's new bar, Gloworm. Deacon noticed that Nick's mother, Nikki Newman, whom he had met in Alcoholics Anonymous, was a frequent customer and encouraged her to become sober again. However, Meggie McClain wanted Nikki's longtime paramour, the very rich Victor Newman, for herself, and had been spiking Nikki's non-alcoholic drinks in an attempt to push her off the wagon. In exchange for a large sum of money, Deacon agreed to help Meggie in her quest to secure Victor and became Nikki's “drinking buddy,” even though he wasn't actually drinking himself.
After Meggie arranged for Victor to find Nikki passed out in Deacon's bed, Victor sent Nikki to rehab, but Meggie made sure Deacon was admitted there, too. Victor confronted Deacon and raged at Nikki for turning to him, after which Deacon realized he had developed real feelings for Nikki. Deacon told Meggie he didn't want to be part of their con anymore, but Meggie drugged Victor, her plan being to marry him, then murder him and inherit his wealth. Victor turned the tables on Meggie, and she was promptly arrested, yet all Nikki had been told was that Victor was marrying another woman, so Nikki found comfort in bed with Deacon. Victor caught them together, told them the marriage was a ruse to entrap Meggie, and turned his back on Nikki.
Deacon and Nikki grew closer, but Meggie called Deacon from jail and threatened to tell Nikki he was part of her scheme if he didn't get her out of jail. Deacon brought Meggie clothes for an escape, but secretly tipped off a prison guard so that she would be caught before she could break free. Meggie summoned Nikki to her cell and told her that Deacon had been involved in her plot; Deacon couldn't convince Nikki that he had actually fallen in love with her in the process. But, after Victor moved on with Diane Jenkins, Nikki began drinking heavily, and Deacon implored Victor, Nick, and Victoria to help her. Victor soon took Nikki out of town and admitted her into rehab.
Before long, Diane's body was found in a local park, her head having been bludgeoned. Deacon had seen many Genoa City residents arguing with Diane just before the murder, but the police spotted Deacon at the crime scene the next day. Nikki returned from rehab, but was still drinking, and had woken up bloodied next to Diane's body. Deacon admitted that he had witnessed Victoria killing Diane, pointing out that Nikki had been trying to save her, and told Nikki that he wouldn't report Victoria to the cops if she would marry him. Deacon took the drunken Nikki to Las Vegas for the ceremony, then leaked the nuptials to the tabloids. Nikki's billionaire best friend, Katherine Chancellor, offered Deacon a fortune to annul the marriage, and Nick attacked Deacon for taking advantage of his mother. Meanwhile, Nikki was stunned when Victoria insisted she hadn't killed Diane, contrary to Deacon's story.
After Nikki told Victor that she had killed Diane, he confessed to protect her and was sent to jail, but, when Victor was about to be handed a 25-year sentence, Nikki barged into the courtroom, admitting her guilt, and was jailed for contempt. Deacon visited Nikki in prison, where she railed at him for coercing her into marriage; he quit his job and went on a spending spree using her money. But soon, Deacon revealed that he really cared for Nikki, who cozied up to him in an attempt to find out more about Diane's murder. Deacon spied Nikki looking through files on his laptop and was about to strangle her before they were interrupted; Nikki had been watching a video of Deacon having sex with Diane.
When Nikki caught Deacon hiding Super 8 film on which the sex video had been shot, he kidnapped her and took her to a warehouse to show her other videos: he had footage of Nikki hitting Diane in the head with a rock. But the footage also revealed that Diane was trying to inject Nikki with a syringe -- Nikki had acted in self-defense, and Deacon was only trying to protect her. Deacon was arrested for kidnapping, but the video helped exonerate Victor. Questioned by the district attorney, Deacon confessed that Diane had come to him for help: she had run afoul of Victor and wanted to frame him for her “murder,” after which she would leave the country alive and well; Deacon was to film the faked killing. But then, a very drunk Nikki had stumbled into the park and fended off Diane's attack with the rock, so Deacon further bludgeoned Diane to make it look like someone bigger and stronger had killed her. Deacon had taken the park's security camera, and other items, to keep anyone from finding out about Nikki's involvement. In addition to serving time for kidnapping, Deacon was now faced seven years in prison for obstructing justice.
Deacon helped clear everyone else of charges when he recognized a woman who had helped him clean up after Diane's murder: the notoriously insane Patty Williams, who had actually killed Diane for trying to seduce the object of her decades-long obsession, Jack Abbott.
While Deacon served out his sentence, he was visited by Los Angeles-based publishing magnate Bill Spencer. Bill objected to the upcoming wedding of his son, Liam Spencer, to Deacon's daughter, Hope Logan, and promised to pull strings to get Deacon out of jail if he would go to Italy and stop the ceremony. Deacon, who had undergone beatings in jail and desperately wanted to see his daughter, agreed, and Bill blackmailed the prison's warden into setting Deacon free. As per his arrangement with Bill, Deacon showed up at his estranged daughter's hotel room the day of the wedding; while Hope was shocked to see her long-absent biological father (she had been raised by Nick Marone and Ridge Forrester), she forgave him for not being there for her. Deacon was so moved by his daughter's compassion that he almost couldn't go through with Bill's orders, but he forced himself to steal Hope's cell phone and forge a note telling Liam she'd changed her mind about marrying him.
While Bill and Deacon's interference nearly did split Hope and Liam up, the young couple reunited; Bill paid Deacon off anyway and told him never to return to Los Angeles. Deacon texted Brooke, wanting to see Hope; Brooke kept the text a secret, which caused Ridge to leave Brooke during their honeymoon. Undeterred, Deacon confronted Bill in his office and said that if Bill didn't give him a job, he would tell everyone how Bill used him to stop Hope's wedding. Bill threatened to have Deacon killed, but Bill's pregnant wife, Katie Logan, walked in during this exchange; the news of Bill's illegal activities regarding Deacon caused Katie to go into premature labor and nearly die because of the strain on her transplanted heart.
After nearly two years, Deacon resurfaced in Los Angeles and met Quinn Fuller in a bar. Hope had been torn between Quinn's son, Wyatt Fuller, and Liam; when Quinn learned Deacon was Hope's father, she offered him a place to stay if he would help push Hope toward Wyatt. Deacon visited Hope, who forgave him for what happened in Italy and agreed to foster a father-daughter relationship with him. Deacon then introduced himself to Wyatt and bonded with him over a bottle of Scotch.
Deacon became concerned when he caught jewelry maker Quinn welding a full-size sword based on the necklace she had once made for Bill. Deacon thought Quinn was kidding when she said she wanted to kill Liam, but he later told Wyatt about the sword; this allowed Wyatt to get to Liam's in time to prevent Quinn from committing murder. Deacon stayed on at Quinn's while she was away at a psychiatric hospital and began spending time with Brooke, who had nearly married Bill in Abu Dhabi until Ridge's interference ended with Ridge suffering brain damage from falling out of a helicopter into the Persian Gulf. Ridge felt that Bill was responsible, so Deacon teamed up with Katie to find information that tied Bill to the “accident.” Once the revelation had Brooke reevaluating her relationship with Bill, Deacon asked Brooke for another chance and kissed her.
A Mexico City detective came to Quinn's to talk to Wyatt, and told Deacon that Ricardo Montemayor, the man who had left Wyatt a priceless blue diamond, had been murdered. Deacon poked around Quinn's place and found a video Ricardo had made for Wyatt in which he made several pointed references to Quinn. When Quinn came home, Deacon accused her of killing Ricardo, but found himself staring down the barrel of Quinn's gun. Quinn claimed innocence, then told Deacon she could help him get Brooke back. Quinn learned that Ridge had lost his ability to design as a result of the helicopter accident, then instructed Deacon to pass this news on to Brooke; Deacon did, and he was waiting when Brooke once again pushed Bill away. Deacon spent time with Brooke and bonded with her regarding their daughter, Hope, but later, when Deacon proposed to Hope, he was dismayed when Brooke didn't accept right away, and even more so when Bill, who had just learned that Ridge's drawing ability had returned, interrupted Deacon's proposal by proposing to Brooke himself. Deacon thought that Brooke had reunited with Bill, so he fell into bed with Quinn, but it turned out Brooke had rejected Bill also, and took a job at Forrester Creations' office in Milan to help get her head on straight.
Meanwhile, although Quinn wasn't looking for any kind of commitment, Deacon began enjoying a flirtatious, casual relationship with her. When Hope found out that her father was romancing the woman who had tried to kill Liam, she refused to accept Deacon's relationship, and told him to choose between her and Quinn. Deacon was ready to give Quinn up for Hope's sake, but allowed himself to be seduced back into Quinn's bed.
Deacon became concerned to see Quinn fixating on Hope, who was expecting a baby with Wyatt; Hope didn't want Quinn near them, so Deacon asked Quinn to respect his daughter's wishes and stop confronting Hope about being a part of the baby's life. Deacon was beside himself when Hope fell down a flight of stairs and miscarried after Quinn went to see her. Deacon comforted Hope in the hospital, then found Quinn on the roof of her jewelry company, contemplating jumping off with Bill egging her on. Deacon talked Quinn down and told her he would stick by her.