In the first season, Ellen Morgan was a bookstore manager in Los Angeles who endured the vicissitudes of life and love with her roommate, Adam Green (Arye Gross), a slob and aspiring photographer, and her friend Holly (Holly Fulger) and Anita (Maggie Wheeler). By the 1994 fall season, the show's name had changed, Ellen owned the bookstore (Buy the Book), and she had a new supporting cast. Although her roommate Adam remained for one more year, her new friends included Joe Farrell (David Anthony Higgins),  a co-worker who ran the coffee bar and the bookstore, and her glamorous and self-centered childhood friend Paige Clark (Joely Fisher), a film executive. In the 1995-96 season, Buy the Book had been destroyed in an earthquake; after rebuilding it, Ellen sold out to a chain, although she remained as manager. By the end of the season, another new character, Ellen's annoyingly naive friend Audrey Penney (Clea Lewis), had been added, and Adam had been replaced by a new roommate, Spencer Kovak (Jeremy Piven), Ellen’s  cousin and a former doctor who had moved to Los Angeles to start a new life. Ellen’s parents, Lois and Harold Morgan (Alice Hirson and Steve Gilborn), as well as her gay friend Peter (Patrick Bristow) also made occasional appearances.

The sitcom’s tone was a combination of the “single woman on her own” promise originally popularized by  The Mary Tyler Moore Show and the kind of physical comedy reminiscent of I Love Lucy, featuring DeGeneres's talent for physical antics and sight gags. Indeed, one review of  the Show's first season referred to DeGeneres as a combination of Mary Richards and Lucy Ricardo. Much of the humor revolved around Ellen's active but unsuccessful dating life. Although it performed respectively, the show was never an unqualified ratings success. By the end of its first season, there was speculation that they sitcoms seemingly unrelenting focus on Ellen Morgan’s lack of success at romance was the problem and that Ellen lacked chemistry with men because she was gay, an interpretation bolstered by her someone androgynous style and by the way the comedy milked her clear discomfort and ineptitude at dating for laughs. Joyce Millman, television critic for the San Francisco Examiner, wrote “A single gay sitcom, Ellen doesn't make any sense at all, until you view it through the looking glass where the unspoken subtext becomes the main point. Then Ellen is transformed into one of TV’s savviest, funniest, slyest shows. Ellen Morgan is a closet lesbian.”

Speculation about DeGeneres’s own sexuality also was a factor in rumors about the sitcom. DeGeneres was notoriously private, refusing to speak about her personal life in public, but allusions to her sexuality in the press were more frequent by 1996. In the summer of that year, DeGeneres began to discuss the implications of coming out with her publicist. A story in a September 1996 issue of Ellen were considering a storyline about Ellen Morgan’s coming out in the 1996-97 season, and the show itself began to feature comic allusions to the possibility in its fall episodes. 

Featuring the reaction of conservative groups and advertisers, the American Broadcasting Company (ABC) and Touchstone Television (which produced Ellen and was a subsidiary of Disney, ABC’s parent company) proceeded carefully, admitting that a coming-out episode was planned but might not necessarily be aired. Once the decision was made, ABC scheduled the episode during the 1997 spring sweeps and moved the show to a later hour in the schedule, presumably to avoid targeting an audience with young children. In April 1997, DeGeneres was featured on the cover of Time magazine with a photo caption that read, “Yep, I’m Gay,” discussed her coming out and the sitcom in appearances on both 20/20 and Oprah shortly before the episode was broadcast, and both she and her parents appeared in an episode of ABC’s Prime-Time Live immediately after the coming-out episode (referred to as “The Puppy Episode,” a jokey allusion to the idea that the “real” news of the episode was that Ellen was getting a puppy).

The coming-out episode that aired on April 30, 1997, focused on Ellen Morgan’s own realization that she might be gay. It drew the largest audience of the week, a phenomenon traceable to its enormous publicity and its roster of guest stars, such as lesbian icons k.d. lang and Melissa Etheridge as well as Oprah Winfrey (who played Ellen’s therapist) and Laura Dern (who played Ellen’s love interest). Two more episodes in the spring season dealt with coming-out issues; one focused on Ellen coming out to her parents, and the other centered on Ellen coming out to her boss at the bookstore. In the fall of 1997, Ellen won two Emmys for “The Puppy Episode,” one for editing and another for writing. It also received a Peabody Award for the episode.

Despite the initial favorable reaction to the coming-out storyline, the 1997-98 season of Ellen was troubled. The high ratings for the coming-out episode were not sustained, and, as Ellen Morgan began to explore her new identity through a romantic relationship with a woman, complaints that the show was “too gay” began to surface. ABC placed parental advisories before the episodes and gave them a TV-14 rating, promoting protests from both DeGeneres and gay rights organizations. By the spring of 1998, ABC had canceled the sitcom. There were accusations from DeGeneres that the network had not been supportive of the show, claims from ABC executives that the sitcom had turned into her personal soapbox, and arguments from television critics and commentators that it had simply ceased to be funny. Regardless, there was widespread agreement that Ellen had changed the face of television by introducing a gay lead character, a view that gained strength from the large number of programs with gay themes that followed in its wake and that faced little controversy.