Stephen Butler is the son of farmer Wilf Butler. Their farm, Butlers Farm was owned by Home Farm Estate, and Wilf was on the brink of becoming bankrupt. The pair struggled to accumulate the money to pay rent, however Jack Sugden paid the unpaid rent, costing him his job.

In May 2003, Ali Marsden began spreading a rumour that Stephen was gay. Donna Windsor, who had recently become his girlfriend, was furious and only caused the rumour to spread around further. When Stephen's friend Andy Sugden ended up believing the rumours, Stephen has words with him and leaves the village.

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