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Lisbon was raised in Chicago. Her mother was a nurse, and her father a firefighter. Her mother was killed by a drunk driver when she was 12. After her mother’s death, her father became a drunkard and ended up killing himself. Lisbon said that he “damn near killed me and my brothers too,” leaving both possibilities open. It may have been something like another drunken car accident, or simply neglect. In Red Badge Lisbon mentions that her father used to be violent, as he once beat one of her brothers half to death and didn't remember. Apparently her father suffered blackouts when he drank. She has three brothers. One of them is named Tommy (probably derived from Thomas) and is listed under "Town & Country Electrical" in Lisbon's diary. She seem to be at odds with him because she "forgives him for whatever" and wants him to make up with his brothers. She also has another brother named James, who is mentioned by Walter Mashburn in the third season. Her brother Tommy becomes a bounty hunter; Tommy Lisbon, a single parent, and his 14-year-old daughter Annie appear in the fourth season episode "Where in the World is Carmine O'Brien?" Lisbon seems to take a parental role towards Tommy, whom she regards as a bit of a screw-up, and tells Jane "I practically raised that punk and his brothers."

Tommy regards her as overly controlling, but is pleased when she expresses pride in him at the end of the episode. Annabeth wants to be a cop like her aunt because she thinks Teresa is totally "badass" and gets to beat up bad guys. Teresa's family nickname is "Reese."

Before joining the CBI she was a police detective for the San Francisco Police Department. There, she was assigned to the team of Agent Sam Bosco, whom helped to train her to become the cop she is today. She assisted investigating and bringing down a serial child rapist by the name of William McTier in the San Francisco bay area. That move made her career, and also earned her the nickname "Saint Teresa" in the papers.

Lisbon maintains strictly professional relationships with her subordinates, hardly ever discussing details of her personal life or of anything outside of the task at hand. In spite of Lisbon's preference for following proper procedures, Jane persistently contradicts her plans and at times directly undermines her authority, usually apologizing immediately afterward. Although she criticizes most of Jane's tricks and revelations in front of him, she also often defends him from suspects (especially those with political pull) or from her very own superiors.

One of the darker conflicts between Lisbon and Jane arises whens "Red John," a serial killer who murdered Jane's family, purposely appears within their jurisdiction. Lisbon was forced to draw the line when Jane revealed that he plans to kill Red John when he is found, putting them on opposing sides (Lisbon wants Red John brought to justice, not killed outright). Lisbon even confronts Jane at the end of the first season, telling him, "Can't you see there's people who care about you, who need you?" referring to his tendency toward self-destructive behavior and dangerous plans where getting revenge on Red John is concerned.

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