Fallon is the epitome of the spoiled little rich girl. The second child of Blake and Alexis's children, Fallon is willful, impulsive and fiercely protective of Blake. She is without a doubt "Daddy's little girl." Fallon hated Krystle when she married Blake. As part of a deal to bail Blake out of financial trouble, Fallon married Cecil Colby's nephew Jeff. Fallon was also having an affair with her father's chauffeur Michael Culhane at the time. The affair came to an end when Blake found out about it and fired Michael.
The hatred Fallon felt for Krystle grew when she found out that Krystle was pregnant. Feeling threatened, Fallon seduced Jeff and became pregnant as well, but after Krystle's miscarriage, Fallon wanted an abortion but failed to go through with it. With her sham marriage practically over, Fallon became involved with psychiatrist Nicholas Toscanni. Unfortunately she didn't realize that he was using her to get back at her father.
Blake Jeffrey Carrington Colby was born by cesarean section following a car accident in which Alexis confessed to Fallon that Blake may not be her father. Fallon lost control of her car when Alexis said her father may be Cecil Colby. She went into a severe depression and remained in it until blood tests proved that she is indeed Blake's daughter. Jeff and Fallon's marriage was strained even more when their son was put through heart surgery at a few days old. Nick soon realized that Fallon was going back to Jeff and took further steps to hurt the Carrington family by arranging for the baby to be kidnapped.
During the search for her baby, Fallon and the rest of the world discovered the secret of Adam's kidnapping. After the safe return of the baby, Fallon took over one of Blake's properties (La Mirada Hotel) and transformed it into an extravagant resort and changed the name to La Mirage. After nearly being seduced by Adam (not knowing they were related), Fallon unsuccessfully tried to discredit him.
With her divorce from Jeff final, Fallon moved on to her next two conquests. The first was tennis pro Mark Jennings. Mark was Krystle's ex-husband that had been tracked down and lured to Denver by Alexis. Alexis and Fallon had intended for Mark to break up Blake and Krystle but instead he fell for Fallon. Alexis didn't like what she was seeing and broke them up.
A short time later, Fallon met and fell madly in love with playboy Peter DeVilbis. Despite everyone's warnings, Fallon planned to marry Peter but he was only after her father's money. When she realized he had used her, she ran from the hotel and was struck by a car. The trauma of the situation left her temporarily paralyzed and caused her to have tremendously painful headaches. While having Jeff caring for her, Fallon realized just how much she truly loved Jeff. On Little Blake's second birthday, Jeff proposed and Fallon happily accepted.
On their second wedding night, Fallon had yet another massive headache. This time it was so horrible that she ran out of the house and drove away in the pouring rain. She was in a serious accident and several weeks later was said to have died in a plane crash with Peter DeVilbis. As her family mourned, Fallon was actually in Los Angeles, California suffering from amnesia.
She was unknowingly drawn to Miles Colby (not realizing who she is) and joins him on a trip to Colorado to attend a party at the Carrington mansion. When she arrives at the house, she is unable to go inside and she and Miles drive away without having made an appearance. Jeff is looking out the window when Miles pulls up and sees Fallon with him. Jeff moves to Los Angeles and arrives shortly before Miles comes home with his new wife "Randall." Jeff makes her realize that she's actually his fiancÚ and the mother of their child.
Fallon regains her memory and returns to Jeff, leaving Miles hurt and angry. Her marriage to Miles is annulled and she decides to marry Jeff again. Miles rapes Fallon and she becomes pregnant, causing her to not know if the child belongs to Miles or Jeff. Still living in Los Angeles at the Colby mansion, Fallon falls down a staircase and goes into premature labor. She delivers daughter Lauren Constance Colby and is relieved to discover that Jeff is her daughter's father.
On an unusually warm night, Fallon is stunned to be trapped in the desert and sees a very strange light. She walks slowly towards a spacecraft and boards the craft. Several hours later, she is found by the side of the road. Desperate to regain her senses, Fallon begs Jeff to take her back to Denver.
Once there, Fallon sends for the children and the Colby family moves back into the Carrington mansion. She tells Jeff of her experience and he thinks she's lost her mind. They continue to have problems and divorce again. She begins dating John Zorelli, a police detective investigating the death of Roger Grimes. It is later discovered that Fallon had killed Grimes as a child when she saw him beating Alexis. Fallon eventually moved back to California where she shared a home with her children and Krystina while Blake was incarcerated and Krystle supposedly comatose.