On January 12, 2018, The Wall Street Journal reported that Donald Trump's personal lawyer, Michael Cohen, paid Daniels $130,000 in hush money in October 2016—shortly before the presidential election—to deny that she had an affair with Trump a decade earlier in 2006. On behalf of his client, Cohen denied the existence of an affair between Trump and Daniels, but he later stated: "In a private transaction in 2016, I used my own personal funds to facilitate a payment of $130,000 to Ms. Stephanie Clifford."


On March 6, 2018, Daniels filed a lawsuit against Trump. She claimed that the nondisclosure agreement that she had signed in reference to the alleged affair was invalid because Trump had never personally signed it. The suit also alleges that Trump's attorney had been trying to intimidate Daniels and "scare her into not talking". A day later, Cohen initiated an ex parte arbitration process that resulted in an order that barred Daniels from disclosing "confidential information" related to the nondisclosure agreement. The order itself, which Daniels' lawyers called bogus, was supposed to remain confidential.
In a March 25, 2018, interview with 60 Minutes, Daniels said that she and Trump had sex once, and that later she had been threatened in front of her infant daughter and felt pressured to later sign a nondisclosure agreement.

On April 9, 2018, FBI agents raided Cohen's office and seized emails, tax documents and business records relating to several matters, including payments to Daniels.
On April 30, 2018, Daniels filed a lawsuit against Trump on libel charges because he called her statements "fraud". It relates to Trump's statements on Twitter claiming that Clifford had invented the story of the man who threatened her after she decided to tell journalists about their affair.