When Steffy's nephew Douglas visits, he tells her, Liam and Hope that Phoebe is Beth (Hope and Liam's daughter) and that he heard his dad, Thomas say that Beth was alive. Steffy and Hope thinks that Douglas is confused, but Liam would not let it go. Steffy tells Liam that Beth is gone and that her baby is Phoebe. After Steffy returns with Kelly from a doctors appointment, Liam and Hope break the news to her that Flo, who was the supposed birth mother confessed that Phoebe is Beth and that she is not the birth mother. Also they fill Steffy in on Dr Buckingham switching Beth with a stillborn baby, and that he sold Beth to Steffy because of his gambling debt. However Liam and Hope tells Steffy that Taylor was not involved in the illegal adoption, and that she wanted to give Steffy a daughter by paying Reese a lot of money. Unaware that Taylor gave Reese the money for his gambling debt. Liam reveals who knows about Beth being alive including Thomas. Steffy at first refuses to give up Beth because she had bonded with her and loves her, but after realizing that Beth is Hopes daughter (even though there is no proof) and that Hope never got the chance to be Beth's mother, Steffy gives Beth back to Hope. After Liam, Brooke, and Hope leave with Beth, Steffy collapses in Ridges arms crying over the loss of Phoebe.