Katherine "Katie" McDonald was the daughter of Jim and Liz McDonald who was born prematurely on 1st January 1992.
Liz went into labour when Steve went missing on New Year's Eve. After being born, Katie was placed in an incubator although the McDonalds were told by Doctor Swann that their daughter's chances were not good. They were grief-stricken when she passed away the following day. She was buried a week later by Liz, Jim and Andy; Steve stayed away as he blamed himself for causing Liz's early labour.
Katie had a head of fine, fair hair, despite being premature. Before leaving hospital, Liz was given a photograph of Katie which Jim placed in a silver frame. In July 1993, 11 Coronation Street was burgled and the frame stolen, but the picture was soon found discarded in the ginnel by Deirdre Barlow and returned to Liz.
Liz thought about Katie a lot, especially when she was to become a grandmother. In 2004, Liz disapproved of Steve's decision to play no part in the upbringing of his daughter Amy, and out of gratitude for Liz's support, Amy's mother Tracy gave her daughter the middle name Katherine. Steve's wife Karen felt that Katie had only been brought up to make Steve feel guilty about the part he'd played in her death. Liz also mentioned Katie after Becky McDonald had a miscarriage in 2010 and when Michelle Connor had a late miscarriage in 2017, both times to urge Steve's wives not to let the tragedies destroy their marriages.
In September 2018, Jim returned to the street for the first time in seven years and introduced Liz and Steve to a woman who he claimed was Katie. Allegedly, Katie had been swapped at birth, survived, and was brought up in Australia under the name Hannah Gilmore, and Jim had discovered his parentage of Hannah through their common diagnosis of Myotonic Dystrophy. In reality, Hannah was Jim's much younger girlfriend posing as his late daughter so the two of them could scam money out of Liz. Although Liz and Steve were convinced by the story when Hannah provided false positive DNA test results, the following month Hannah let the truth out after becoming jealous of Jim's closeness with Liz, and the couple departed without receiving any money.
- Katie never appeared in Coronation Street. She was born in Episode 3326 (1st January 1992) and died in the following episode, with both events occurring off-screen. Katie's date of death was seen on her gravestone in Episode 3484 (1st January 1993).
- Two photos of Katie appeared on the programme 26 years after the character's death, specifically in Episode 9558 (12th September 2018) and Episode 9584 (12th October 2018).