Katie was the daughter of Donna, family friend and former babysitter of the Winchesters.
Donna called Sam and Dean concerning poltergeist activity in her family's new home. What had began as bumping and scraping in the walls had culminated into an attack on Katie in which the words "Murderd Chylde" were carved into her skin.Sam's research uncovered the local lore around the original owner of Donna's house, Isaiah Pickett, which held that in the 1720s, he'd hanged young Maggie Briggs in his backyard for being a witch. Later, prospective witch Gary Frankle worked a spell by which he swapped bodies with Sam in an effort to collect a demon bounty on Dean. In the course of Gary's research on witchcraft, he had discovered that Pickett actually murdered Maggie Briggs after she became pregnant with their illegitimate child, and buried her body in the basement of the house. This explained why the angry spirit had etched that particular message into Katie's abdomen.
Dean and Gary went the house and ultimately salted and burned Maggie Briggs' bones, clearing the house for Katie and her parents.