Pam Douglas and her sister, Stephanie, were raised by John and Ann Douglas in a suburb of Chicago. Stephanie married Eric Forrester and moved to Los Angeles, rarely mentioning her sister and telling her everyone that her parents were dead. In reality, John had abused Stephanie as a child, which Ann had ignored. When Stephanie's controlling behavior got out hand, she sought therapy with Taylor Hayes, who suggested that Stephanie go to Chicago and confront Ann. With Eric at her side, Stephanie found Pam taking care of widowed Ann, who was still in denial. Mousy Pam finally spoke up and confirmed the abuse, admitting she was too scared as a child to help her older sister.Stephanie remained at odds with her family until Eric invited Pam and Ann to Los Angeles for Christmas. After Ann returned to Chicago, Pam stayed on in the Forrester guest house and took a shine to Eric, actively discouraging Jackie Marone's interest. But Pam, who had a long-held resentment about Stephanie living the high life while Pam was stuck caring for their mother, started showing signs of instablity. When Pam went off her medication for bipolar disorder, Ann feared that Pam had shot Stephanie, although Storm Logan had pulled the trigger. Stephanie's marriage to Eric crumbled, and Eric moved on with Donna Logan. Pam trapped Donna in a tanning bed and turned Donna's hair and teeth green. Pam also replaced Eric's Viagra with sleeping pills. But Pam's pranks got more serious when Pam intimidated Donna with "Tiny", her giant Doberman, and threatened to kill Donna on several occasions. Eric and Stephanie blew off Donna's concerns about Pam. "Tiny" died after eating a lemon bar Donna threw to distract him. Finding out that the dog actually died from a reduced dose of heart medication did nothing to quell Pam's hatred of Donna.
After Donna and Eric were married, Eric had a heart attack in bed and slipped into a coma. Donna, who had been eyeing Owen Knight, was accused of spiking a bottle of gin. But Eric had actually fallen ill after Pam fed him a laced lemon bar, only hoping to weaken him and make him sexually undesirable to Donna so Eric would go back to Stephanie. Pam lured Donna to the Big Bear cabin, where she held Donna at gunpoint, doused her with honey, and let a bear in to attack her. Pam ran off after Owen saved Donna.
A crate arrived for Donna at Forrester, but her son, Marcus Walton, opened it and was bitten by a snake. Soon after, Donna's mother, Beth Logan, was hit by a car. Pam returned and promised to kill Donna's family, and even Eric, if Donna didn't leave Eric. Donna complied, but confided in Owen, who told Eric and Stephanie. Together, they coaxed Pam out of hiding by lying that Ann was deathly ill. Stephanie gently got Pam to admit that she did everything to make up for not protecting Stephanie from their father. It was revealed that Pam had developed a mass of scar tissue on her brain after falling down the stairs running from her father as a girl. Donna scoffed that a tumor couldn't have made Pam violent, but after an operation, Pam had no memory of what she'd done, and tried to make amends with Donna before being transferred to a facility in Chicago.
Pam returned for follow-ups in Los Angeles and was hired to design bikinis for Forrester's new surf line. But Pam was jailed on suspicion of blowing up Rick Forrester's car and setting fire to his house. (The real culprit was Thomas Forrester.) Pam's fascination with the game show The Price Is Right led her to make a clerical error on Ridge Forrester's marriage license, invalidating his marriage to Brooke Logan. Later, Pam and Donna ended up on The Price Is Right together and actually enjoyed themselves. But when Donna modeled the Royalty line's showstopper, Pam couldn't resist dumping gallons of honey on Donna.
Pam left Forrester and joined Stephanie, who had defected to Jackie M. Jackie befriended Pam, who fit in with Jackie M's "band of misfits." Later, Pam supported Stephanie through a mini-stroke, and found brief fame co-hosting fashion talk show The Catwalk with Donna, amusing audiences with her "cat dance." Ann made a mysterious trip from Chicago and announced she was dying. Stephanie and Pam butted heads when Pam took Ann to a hospital against Ann's wishes, so the Douglas sisters snuck in and broke Ann out of her room. Pam and Ann had a chance to resolve their issues before Ann died peacefully at Paradise Cove.
Pam returned to Forrester Creations with Stephanie and found an anti-Logan ally in Steffy Forrester. Together, they sabotaged Hope Logan's Hope For the Future showing, rigging the sign to read "HO" For the Future. Donna's father, Stephen Logan, blamed Stephanie for her inadvertent part in the drowning death of his wife, Beth Logan, so Stephen romanced and deflowered the naive Pam, convincing her to stop taking her bipolar medication. Stephanie objected to Pam dating Stephen and dragged Pam to the Big Bear cabin. Stephen arrived and put a gun in Pam's hand, reminding Pam how much she resented Stephanie. Pam nearly shot Stephanie, but backed off, apologizing to Stephen for trying to kill Donna at that very cabin and asking Stephanie what "those poor Logan girls" had ever done to deserve Stephanie's hatred. Stephanie got the gun from Pam and shot Stephen, who later insisted his feelings for Pam were real. Pam and Stephen were soon engaged, and even made wedding plans.
Months later, Stephen inexplicably ditched Pam and ran off to Texas. Pam cited Stephanie's lack of support, but the same day, Pam surprised Jackie's son, Nick Marone, in the Jackie M steam room. With Jackie M in financial trouble, Jackie convinced Pam to steal Forrester designs, promising Nick would return the favor with romance. Nick grimaced at first, but developed a genuine bond with Pam. After the Forresters saw their designs on Jackie M's runway and blamed Beverly, a new intern, Pam wanted to turn herself in.
Pam put itching powder in Donna's nightie when Nick showed an interest in Donna. Pam roped Nick into appearing on Let's Make A Deal, and when Donna saw them together on the show, she realized Pam had stolen the designs and went straight to Stephanie. Pam confessed and was fired from her receptionist job. But after Stephanie forgave Pam and rehired her at the same time Brooke hired Donna for the position, Pam and Donna were forced to share receptionist duties, and a desk.
Pam was devastated when Stephanie, who had been battling cancer, received a terminal diagnosis. Stephanie tried to assure Pam by hinting that Pam would be taken care of, but when Pam asked for clarification, Stephanie only said, "you'll see." After Stephanie died, Pam felt she should return to Chicago, but Eric claimed her as family and asked her to stay in Los Angeles. Pam doted on Eric, and the two found they were both avoiding actively grieving Stephanie. Pam was somewhat amused to discover that Donna was also offering support to Eric. But Pam and Donna uncharacteristically found themselves on the same page when they were dubious about the attention Taylor was starting to show Eric.
When Eric and Taylor officially got together, Pam stabbed a magazine photo of Taylor and confronted the duo in their bedroom brandishing a knife. Taylor screamed, but Pam laughed and showed her she was only holding up a spatula. Pam seemed to accept the relationship, but Eric and Taylor were concerned about Pam's bizarre behavior.
Pam's duties at Forrester included maintaining the Forrester web site, and a search for young Caroline Spencer yielded a photo of Caroline caressing a porn star. Pam was taken aback when Caroline demanded that Pam "fix the Internet." Later, Pam carelessly blabbed to Lt. Baker about a car that had been towed for Brooke, who was trying to cover up a drunk driving accident involving Bill Spencer. Pam also blurted out to Taylor that Brooke was in conference with Lt. Baker, prompting Taylor to listen at the door and ultimately accuse Brooke of sleeping with Bill.