Karen Jackson is the only child of Sheila and Eddie Jackson. Her mother Sheila became agoraphobic sometime during her childhood, which at times can negatively affect their relationship. In the episode Nana Gallagher had an Affair, Karen explains that she lost her virginity when she was 11 years old, and has been sexually active ever since. Her manipulative actions towards Lip and other people in her life including Hyram, make her one of the two main antagonists of season 2.
In Season 1, she is Lip's tutoring student and the neighborhood bad girl. Apparently, "science just turns her on" and she was happy to repay Lip's tutoring with sexual favors. Karen's father leaves after catching her giving oral sex to Ian, which she was only doing for Lip to see if Ian was actually gay. Karen and Lip develop a sexual relationship, with Lip clearly falling in love with her, but she refuses to be his girlfriend. Eddie ends up taking Karen to his church's purity ball in hopes of getting her to stop having sex. She agrees to go in exchange for a car, but ends up getting called a whore by her own father when she admits her sexual history at the ball (a required part of the purity ball's program). After this, Karen comes home and vandalizes her dad's room. Sheila forces him out of their house, and Karen begins to breakdown. The next day, Lip finds Karen in the basement spray painting the words, "Fucking Asshole," on the wall. Lip confronts her, and calls her a 'slut,' causing her to kick him out. That same night, Karen starts a video blog confronting her dad. She then finds a drunken Frank and rapes him. She sends the video to Eddie and, he ends up killing himself, as he feels he's failed as a father. Karen does not feel bad about what happened to her father.
Frank Gallagher put it best when he called Karen Jackson as “a beautiful mess” because never have those words had more meaning than when they were used to describe her. In Season 2, Karen was with a guy named Jody who was from her Sex Addicts Anonymous class and marries him, but after a while she begins to ask Lip to get rid of Jody for her. Karen became pregnant with many thinking Lip was the father. However, it was revealed that Karen herself did not know the father of the baby though she assumed it was one of her old teachers. Karen decided that she was going to sell the baby, going to extreme lengths to find someone interested and willing to pay the most money, despite Lip's pleas for the baby to go to a good home. In the penultimate episode of Season 2 Just Like the Pilgrims Intended, Karen gave birth to the child, and to Lip's surprise, it is not his. The baby is of Asian-American descent, and has Down Syndrome. Lip exited the delivery room and told the would-be adoptive parents the situation, with their reaction suggesting they no longer wanted the child. At the end of the episode, Sheila abducted the baby from the hospital.
Karen returns from the hospital, knowing Shelia had taken the baby, and told Shelia that the baby had to leave. She ended up calling the cops on Shelia, and after the cops refused to take the baby from Shelia, had an argument with her about the baby. This resulted in Karen giving Sheila an ultimatum, that her mother choose between the baby or Karen. Sheila pleaded with Karen but she was unable to change her daughters mind, but ultimately decided to keep the child. Karen kept her word and left her mother's home in response. Her son is named Hyram, with the nickname of Hymie given by her mother Sheila.
In the episode "A Long Way from Home" Hymie's biological father and paternal grandmother show up at Sheila's home to take Hymie. Sheila is initially resistant, but eventually decides that her home is not a proper place to raise Hymie because of her boyfriend's (Jody) kinky sex acts (for which he previously attended Sex Addicts Anonymous for). Sheila allows Hymie's father to take him. Later in the episode, Karen returns home. She apologizes to Sheila for leaving and for making Sheila choose between her and Hymie. She expresses interest in Hymie, and implies that she came back for him. However, it is later revealed that Karen contacted Hymie's father and told him to take Hymie away from Sheila. Karen claims that this was intended to help her and her mother get back to the way things were before Hymie was born.
Karen begins to be frustrated when her mom doesn't speak with her. Around this time Sheila gets some pep talk about her relationship with her daughter. Karen, still having sexual lust for Lip, tries to meddle with Lip and Mandy's relationship, but Lip decided to choose Mandy over Karen, as Mandy had his best interests at heart and genuinely loved him whereas Karen didn't have the same kind of love and respect for Lip. It's implied she cares about him, but because of her continued and manipulative actions, it doesn't seem that she loves him the way Mandy does. She gets upset and (unwisely) calls Mandy, thanking her for applying to colleges for Lip so that Karen herself could leave with him, and also that all she has to do is trick Lip into one unprotected encounter, and she will have him back.
While this was unlikely to happen, Mandy becomes furious about Karen's threat, having already shown clear insecurity about her relationship with Lip because of Karen. Later, Sheila visits Karen in her room and tries to reconcile with her when Karen receives a text message supposedly from Lip asking to meet at the park. It is later revealed that Mandy was the one who sent that text using Lip's phone. Karen, not knowing this, goes to meet up with him. As she crosses an intersection a car passes by, nearly hitting her. She dodges and directs her middle finger at the car, only to turn around and be rammed by a second speeding car in a hit and run. She is rammed and flipped completely on top of the car, landing on the road behind it as it speeds away.
However, she survives and is treated in hospital. Lip visits twice with Debbie and then alone. When Sheila tells Lip on one of his visits that Karen was excited about Lip's text, he discovers that someone used his phone to text Karen. Sheila explained the Karen lit up when she got the text and that it probably made her so excited that she didn't look both ways. However, Lip asked if he could look at the phone. Lip sees the text on a blood covered phone and ponders. Afterwards, Jody tells Sheila that they need to watch her one at a time, and that she needs rest on an actual bed. Sheila agrees. Remembering what Lip said earlier about using things Karen likes to being her out of her coma, Jody starts giving her oral sex which results with Karen waking up. Jody claims to have discovered a cure for the coma as he explain to the doctors about what had happened.
After she awoke from her medically induced coma, Karen's personality dramatically changed. According to Jody, she can only recall memories, but cannot make any more memories; she also answers most questions in monosyllables. Lip visits her and she can still recall him and a few other memories Lip mentions on his next visits. Sheila notes Karen seems so much "happier", presumably because her old, selfish personality is gone. Lip reveals to Karen that it was Mandy who ran her over and Karen amicably digests the news. She then follows up a few moments later claiming she does not know who hit her. She is able to barely pronounce Mandy's name. Sheila also mentions to Lip that Jody and Karen are set to go to Arizona state to help Karen recover and will bring Hymie along. Lip doesn't appear to react to Sheila upon hearing Karen is leaving, possibly forever but it's obvious any chance of a future he had with Karen is gone forever; in any case, he had already decided to break off with her for good just before she was hit.
She leaves at the beginning of the episode along side Jody and baby Hymie as she is strapped onto a wheel chair, leaving Sheila alone.
Lip ultimately confronts Mandy about what she had done, calling her a "twisted, demented cunt" to which Mandy replies she did it for him, and that she did everything for him. She concludes by agreeing with Lip they are indeed over and that she had just performed oral sex on her new boyfriend.