Diane Ballard first appeared in Springfield in 1977 as Phillip Spaulding's nanny. A cunning and ambitious woman, Diane had fantasies of becoming the next Mrs. Alan Spaulding and continually doted on Alan. Sensing that Diane was trouble, Alan's wife, Elizabeth, demanded that she be fired. When Diane was thrown out of the Spaulding mansion, she sought refuge from Ann Jeffers. Ann, depressed over losing custody of her son, JImmie, decided to become a friend and confidant to Diane and even encouraged Diane to seek the job as Alan Spaulding's Office Assistant. Meanwhile, happy with Alan, Diane was dismayed to learn she had competition since he was smitten with Brandy Shelloe. Jealous, Diane went to Spaulding Enterprises and a cat fight between her and Brandy soon ensued, with Diane getting the worse end of it. Diane went to Springfield P.D. Lt. Larry Wyatt and decided to press assault charges against Brandy. Unfortunately for Diane, she couldn't press forward with the charges because that might lead to it come out that she was Alan's mistress. Later, when Elizabeth sued for a divorce, Diane tried to cement her relationship with Alan by helping him in his quest to gain custody of Phillip by falsely proving that Elizabeth was having an affair. Though Alan was able to gain custody of his son by hiring a man named Ramon de Vilar to pose as Elizabeth's lover, he didn't reward Diane the way she'd hoped and instead ended up marrying another woman. Despite her disappointment, Diane still remained loyal to Alan and in 1979 she stole documents from former Spaulding exec Roger Thorpe that would have proved that 1) Alan paid de Vilar to lie and 2) the Alan had illegally adopted Phillip. Diane went to Roger's apartment and the affidavits and some tapes Roger had made of his conversations with Alan. However instead of destroying the documents, like she claimed to, a devious Diane decided to keep them.

While pining for Alan, Diane found time to seduce Ben McFarren away from Eve Stapleton. After the McFarren's marriage was over, Diane, still wanting Ben for herself, found not only a kindred spirit in Greg Fairbanks, but also a person she could have a brief affair with. Since both wanted Ben and Eve apart, they conspired and came up with a diabolical plan. Their plan was to set it up so that Ben would believe that he saw Greg and Eve in an intimate conversation. In reality, Greg was conversation with Eve's sister, Rita, who, at Greg's request, was wearing the outfit she borrowed from Eve. Unfortunately the plan ultimately failed. Shortly after, in 1981, Diane also briefly dated the dependable Mike Bauer, who helped her after she'd had a skating accident and broke her foot. Though the relationship was strictly platonic, Diane did have romantic fantasies; Diane let Mike help her during the two months it took her to recover and then spitefully let her one-time friend and roommate, Ann Jeffers, believe otherwise, knowing that Ann had a crush on Mike.

Later, in late 1981, Diane hit up Alan for more control of Spaulding Enterprises because she knew of many of his secrets, not the least of which was Alan's collusion with Dr. Moreno. When Alan hired Joe Bradley to investigate Diane, Joe was more than happy to do so, because Diane was a very fine looking woman. Joe asked Diane out on a date and then both seduced one another. What Diane failed to catch onto was that Joe was using her to find out what she knew about the Moreno tapes. As pillow talk continued, Joe would learn that this woman had tons more secrets on Alan than just his dealings with Dr. Moreno. Joe was able to ascertain that Diane had known about Alan's collusion with Roger Thorpe, Ramon de Vilar and Dr. Paul La Crosse. It would appear that Diane had hidden affidavits that she had stolen out of Roger's apartment, two years earlier, that proved that de Vilar had lied in court that he and Alan's former wife, Elizabeth had an affair and yet another where, Dr. La Crosse confessed his role in helping Alan in a baby-swapping scheme in the late 1960's. Joe suggested the possibility of he and Diane blackmailing Alan together, and then taking over Spaulding Enterprises.

At the same time, Joe planned on double crossing Diane by stealing her documents. However, Diane caught him in the act. In the meantime, Diane soon acquired more information and began a series of blackmail attempts. She ordered Ross Marler to see to it that Phillip was cut out of Alan's will, or she would tell Carrie Todd that Ross had manipulated Amanda Spaulding. Diane also had documents proving that Henry Chamberlain had an illegitimate son with a woman named Stephanie Ryan, named Sean! Diane used this information to blackmail Henry into cementing a business deal with his old pal, H.B. Lewis, that was favorable to Spaulding Enterprises and Diane learned Joe was working for the Chamberlains, without Alan's knowledge, and she was about to use that information against him! Later, when she was fired by Alan, she was so stung by Alan's disloyalty and rejection, Diane icily threatened to reveal his collusion with Roger Thorpe, Paul La Crosse, Ramon de Vilar and Gonzalo Moreno. Then she started threatening Jackie and Justin with the knowledge that they were the biological parents of Phillip, which no one had yet told Phillip about.

The stage was now set for a disastrous series of events. First, although Diane was fired by Alan, she still had enough stock to need to be at a board meeting at Spaulding Enterprises. Then one night, Diane had a variety of angry visitors such as Henry Chamberlain and Jackie and Justin Marler. Before the night was over, she received a visit from Joe who tried to convince her to turn over her blackmail material. Not only did she refuse; Diane made it clear that she had dirt on Joe as well! Finally, Joe and Diane started to struggle, with Diane trying to hit Joe over the head with the poker. Joe though being taller was able to grab the poker and threw it down on the floor in front of Diane's sofa. Then Diane started pawing at Joe's neck, and Joe shoved her and Diane started flying head first into the fireplace mantel. As Diane lay unconscious on the floor near her fireplace, Joe snuck out. The next morning, when Diane didn't show up for a meeting, Vanessa went over to her apartment whose door was ajar and found Diane's lifeless body, her battered head laying against the fireplace! The murderer turned out to be Carrie Todd, Ross's lover, who saw Diane soon after Joe left.

At her trial, Carrie stated that she and Diane had worked at the Milwaukee firm of Laird & Sogard. While working there, Carrie fell love with a junior accountant named, Todd MacKenzie. They eloped and were happy until Carrie overheard pieces of a conversation between Todd and Diane, which led Carrie to believe that they were having an affair. In truth, Diane had pressured Todd to cook the company books, and strong-armed his mother into mortgaging her home to make up for the shortfall. Just as Carrie learned she was pregnant, Todd was driven to suicide over Diane's duplicitous scheme, and as a result, his mother had a stroke. Emotionally devastated, Carrie spent time in a mental institution, where she gave birth to a baby boy. Because of her unstable condition, she felt unfit to raise the child and unwillingly gave him up for adoption to a couple named Howard and Betty Long. Carrie told the court that she went to Diane's apartment because her blackmailing of Ross, triggered the memory of what happened in Milwaukee and Carrie had pushed Diane into the fireplace during a struggle. Diane's head had been bashed then twice! At her trial Carrie was acquitted by the jury.