Kelly Nelson arrived in Springfield, in 1980, to study medicine. Upon arriving, Kelly got a room at the Reardon boarding house and he became very good friends with high school student Tim Werner and young nurse Hillary Bauer. Soon after, he was hired by Jennifer Richards to tutor her daughter, Morgan, who was dating Tim. Though Morgan initially hated Kelly, calling him "Mr. Perfect", as the summer progressed, the pair started to fall in love. Unfortunately by this time, Kelly was dating Hillary and Morgan was dating Tim, so Kelly decided to keep his feelings a secret and backed out of the tutoring sessions without telling Morgan why. Hurt and confused, Morgan confronted Kelly at Laurel Falls, where they confessed their love. However, since neither one wanted to hurt Tim or Hillary, they decided to put the incident behind them and go on with their lives. Complicating matters was Kelly and Morgan's "friend" Nola Reardon, who wanted Kelly for herself and encouraged Morgan to cement her relationship with Tim by sleeping with him. Nola even bought Morgan birth control pills. Unfortunately, both Kelly and Morgan's mother, Jennifer, found out about the pills, and although Kelly was calm and rational, Jennifer was furious! Needing to confide in Kelly, Morgan was dismayed to see him at Laurel Falls with Hillary and, misconstruing the situation, she ran away to Chicago where she started working for a man named Duke Lafferty at his "nightclub." After an exhaustive search, Kelly, Jennifer, Mike Bauer, and Tim finally tracked Morgan down. At first, Morgan told the group to get lost, but when one of the patrons, at Duke's "club", started to getting rough with her and her mother, Morgan agreed to come home. Unfortunately, the two patrons who roughed up both Morgan and Jennifer started threatening Mike, Kelly and Tim and started to pick a fight with them. Soon after, Mike contacted the Chicago Police Department and they came and finally closed down Duke's "club" since it was, in reality, a prostitution ring.

After that ordeal was over, Kelly and Morgan were more in love than ever, but decided to keep their feelings a secret because they didn't want to hurt Tim. Meanwhile, unbeknownst to Kelly, Nola carried a torch for him and spread lies to Kelly that Morgan and Tim are having sex. In the meantime, Tim realized that Morgan loved Kelly and sought comfort in alcohol. Nola, of course, was quick to capitalize on Tim's problem by encouraging his drinking and instigating fights between Tim and Kelly. Next, Nola plied Kelly with alcohol, and when he passed out, she undressed him, placed him into bed and told him the next morning that they made love. Later, Nola told Kelly that Hillary was having an affair with Derek Colby! Scorned, Kelly dumped Hillary and again got drunk by Nola who claimed they slept together.

In February 1981, Duke Lafferty, wanting revenge on Morgan and Mike for ruining his life, escaped from prison and headed to Springfield where he headed for the Reardon Boarding House and fled with Morgan. Duke took Morgan to an abandoned farmhouse where, for several days, he held her hostage and threaten to kill her. Fortunately, for Morgan, Bea and Nola told the authorities what happened and were able to point them in the direction where she saw Duke flee with Morgan. Eventually, Mike Bauer, Lt. Wyatt, Kelly and Tim reached the farmhouse just as Duke was about to rape Morgan. After this, Morgan was even more in love with Kelly, but couldn't show it, because she was still seeing Tim. Unfortunately, Tim had returned to alcohol and, suspecting the truth, drunkenly confronted Morgan. After the prom, the pair was involved in an accident that left Morgan in a short coma and Tim was sent to rehab. Shortly after Morgan awakened, she and Kelly learned that Nola was pregnant with Kelly's child. Unfortunately for Nola, her honest mother, Bea, knew that Kelly was in no condition to sleep with her that night and confronted her daughter. Their conversation was overheard by Kelly. Shocked that Nola, whom he considered a friend, could be so manipulative, Kelly wrote her off. At the same time, Tim returned from rehab and gave Kelly and Morgan his blessing to be together. Later, in August 1981, Kelly and Morgan married in a beautiful ceremony at Laurel Falls. Months later, Kelly would be on hand to deliver Nola's baby, whom she named Kelly Louise. Sadly, Kelly was forced to tell her that, because of everything she'd done, their friendship was completely over. Her offer of friendship rejected, Nola changed her baby's name to Anastasia.

Not long into their marriage, Kelly and Morgan would learn that real life rarely had fairy tale endings. While Kelly was busy trying to build his medical career, Morgan was embarking on an exciting career as a model. Unfortunately, Kelly was hoping to start a family right away and was somewhat resentful of Morgan's new jet setting lifestyle. Later, when Kelly learned from a gossipy Vanessa Chamberlain, that Morgan had spent the day sailing with Josh Lewis, he assumed the worst and beat up Josh. That seemed to be the last straw for the Nelson marriage and the pair separated. With her marriage in shambles, Morgan began an affair with Josh. However, Morgan didn't want to give up on her marriage just yet and decided to end the affair. Afterwards, the Nelsons decided to work on their marriage by going on a second honeymoon to Tenerife. Unfortunately, while they were there, Josh made an anonymous phone call to the paparazzi, with an anonymous" tip" about where Morgan was staying. The paparazzi followed Morgan to Tenerife, which greatly upset Kelly and he cut their honeymoon short and went back to Springfield. Hurt and angry, Morgan again fell prey to Josh's charms and the pair resumed their affair. In 1982, Kelly found out and demanded a divorce, which Morgan reluctantly gave.

After his divorce, Kelly would fall for someone completely different: a brusque, ambitious doctor named Claire Ramsey. Kelly had been helping Claire with a patient of hers, and the pair become close with eventually Claire confessing her secret of having a child in medical school that she put up for adoption. Completely charmed, Kelly soon asked her to marry him but was rejected. Part of the reason for Claire's reluctance would be revealed in early 1984, when it was learned that she was working for the Center for Disease Control and had arrived at Cedars to investigate the Dreaming Death virus. Also a factor in Claire's decision was the fact that she had feelings for another man, Jim Reardon. Months later, after having a one-night stand with Claire, Kelly left Springfield to accept a job in Boston.