Her husband, Judah Botwin, dies of a heart attack while jogging with their younger son,  a few weeks previously. Nancy's children, Silas and Shane, both attend Agrestic's public school in the early seasons of the show. During season 1, Silas is fifteen years old and Shane is ten. To support her upper middle class lifestyle, Nancy begins dealing marijuana to her affluent neighbors and friends. Andy Botwin, Judah's younger brother, moves into the house after Judah's death to help Nancy out, though he also seems to be there to freeload, and often disrupts her life.
On the advice of her accountant, city councilman Doug Wilson, she opens a retail bakery, stocked with Costco baked goods, as a front for her drug sales. Silas begins dating Megan, an attractive deaf girl at his school. Shane, troubled by his father's death, acts out, such as biting the foot of another child in a martial-arts tournament, earning him the nickname "Strange Botwin" from his classmates.
Nancy's chief antagonist is her neighbor, Celia Hodes, who is manic, image-obsessed, and manipulative. She is president of the Agrestic PTA , and does not get along with her cheating husband Dean, nor with her sexually active year-old daughter, Quinn Silas' previous girlfriend , who she sends off to boarding school in Mexico.
Her younger daughter, year-old Isabelle, is overweight and the target of her mother's passive-aggressive comments, although Isabelle seems mature and confident for her age.
Isabelle reveals late in the season that she is a lesbian, to her mother's chagrin. Toward the end of the season, Celia is diagnosed with bilateral breast cancer. The brush with her own mortality softens her personality and leads her to treat her own daughter with more courtesy and respect. She quickly returns to form after her recovery. However, before her surgery, she meets Conrad and has sex with him. After Andy is notified to report immediately for his military service where he will be trained and then sent to Iraq or be sentenced to a military prison, he announces that he is studying to become a rabbi because he believes it will provide grounds for him to be discharged.
Drug dealing turns out to be more difficult than Nancy thought, as she discovers when she expands her customer base to Valley State College and hires Sanjay, a student at the college, to be her on-campus dealer. She is soon threatened by a rival drug dealer — Alejandro — who considers it his territory. She then has a brief sexual encounter with him. Also at Valley College, her entire stash of product is stolen by a campus security guard during a fake arrest, threatening the survival of her lifestyle.
Unbeknownst to her, Conrad and friends pay a visit to the security guard, attacking and severely beating him. The result is that the guard politely returns the marijuana to a puzzled Nancy, apologizes, and offers to help her business in any way he can. Nancy and Peter Scottson, the single father of the kid bitten by Shane in a karate tournament, develop a mutual attraction, and they end up sleeping together. There is also attraction between Nancy and Conrad, much to Heylia's annoyance.
The season closes with Conrad convincing Nancy to expand by becoming a grower as well as a dealer. They form a "team" that includes Doug, Dean, Sanjay and Andy. However, Nancy then encounters a complication: