Grace Monroe arrived in town with her grandfather in 1999, looking for Ben Davidson (not knowing that he was her brother). Her grandfather worked for the mob and Ben was a doctor for a rival mob. Grace's father had died while Ben was treating him and because of this, Grace's grandfather wanted to kill Ben. They got pretty close, Ben was shot, but he didn't die. When Grace found out that she was taken away by the mob as a child and Ben and Sam were really her brothers, she decided to stay in Llanview with her family. She was raised with the name Monroe, but her real last name was Davidson, so she changed it back to Davidson. Her brother Sam changed his name a long time ago to Rappaport, because he didn't want anything to do with the mob.

As soon as she arrived in town, Kevin Buchanan became interested in her and they dated for a while. Then Rae Cummings arrived in town. Grace had had an affair with Rae's husband and Rae found out and hated Grace because of it. Rae wanted to break up Grace's and Kevin's relationship. It worked for a while. When Kevin found out he was mad. But it didn't work for long, and before you knew it, Grace and Kevin were back together. Kevin asked Grace to marry him and she accepted, but at their engagement party, Asa Buchanan showed Grace some pictures he had uncovered of her sleeping with her father's mob friends. Upset, Grace ran out into the storm and ended up in the Buchanan's summerhouse, where she got locked in. She fell through a hole in the floor (the summerhouse was under construction) and ended up in the cold water below. Rae came and unsuccessfully tried to save Grace, the two women made peace and Grace told her that Daniel was in Pine Valley. Both woman were eventually pulled from the water, but despite her brother Ben's best efforts, Grace died.