On the July 2 episode of Raw, Runnels made his television debut, using the ring name Cody Rhodes, in a backstage segment with his father Dusty Rhodes and Randy Orton, where Orton introduced himself to Rhodes and then slapped Dusty as a sign of disrespect. On July 9, Rhodes slapped Orton in return, and the following week, Rhodes faced Orton in his debut WWE match, but lost. Rhodes appeared at The Great American Bash to prevent Orton from further attacking his father. The next night on Raw, Rhodes challenged Orton to a rematch from the previous week, only to lose again. Orton followed this up by kicking Rhodes' father in the head, similar to how he had, in storyline, nearly ended the careers of Shawn Michaels and Rob Van Dam.
Rhodes' next storyline was a rivalry with Daivari, after he pinned him on the July 30 episode of Raw, to keep his job. In the midst of this rivalry, he also feuded with The World's Greatest Tag Team, defeating both members, Charlie Haas and Shelton Benjamin in singles matches. The two feuds combined, when Rhodes, along with Paul London and Brian Kendrick, beat The World's Greatest Tag Team and Daivari in a six-man tag team match.The following week, Rhodes teamed up with Mickie James to defeat Daivari and Jillian Hall, ending their scripted rivalry.
Three weeks later, he began a feud with Hardcore Holly and lost three consecutive matches to him. Rhodes eventually earned Holly's respect, impressing Holly during their matches with his persistence and several near-falls, and the two formed a tag team. They earned a shot at the World Tag Team titles by defeating Paul London and Brian Kendrick and The Highlanders in a WWE.com exclusive match after an Alabama Slam. They fought against the Tag Team Champions Lance Cade and Trevor Murdoch at Survivor Series, in what was Rhodes' first on-screen title shot and pay-per-view match, but were unsuccessful. On the November 19, 2007 episode of Raw, Rhodes faced Holly for a fourth time, and beat him for the first time, although they were both attacked by Randy Orton afterwards.
On December 10, 2007, on the Raw 15th Anniversary special episode, Rhodes along with Hardcore Holly defeated Lance Cade and Trevor Murdoch for the World Tag Team Championship, marking Rhodes' first championship in WWE. The following week, Rhodes and Holly retained their title, in their first title defense, against Cade and Murdoch. They also successfully defended the championships against the teams of Santino Marella and Carlito and Paul London and Brian Kendrick. In May 2008, Ted DiBiase began feuding with the duo, threatening to take their titles in his first match as part of the Raw brand
At the pay-per-view event, Night of Champions on June 29, Rhodes turned on Holly by revealing himself as Ted DiBiase's partner to help DiBiase win the match, becoming a villain. After holding the championship for just over a month, they dropped it to John Cena and Batista on the August 4 episode of Raw. The following week, DiBiase and Rhodes used their rematch clause to regain the championship. Rhodes and DiBiase were joined by Manu, the son of Afa Anoa'i, in September, forming a stable of multi-generational superstars. On the October 27, 2008 episode of Raw, Rhodes and DiBiase lost the World Tag Team Championship to Kofi Kingston and CM Punk.
During this time, Rhodes, DiBiase and Manu entered a storyline with Randy Orton where Orton constantly criticized and insulted them, and attacked DiBiase on the November 3 episode of Raw. At Survivor Series, Rhodes, along with Orton, was a sole survivor, for Orton's team, in the annual Elimination match. Rhodes and Manu accepted Orton's offer for an alliance in the following weeks, and the trio dubbed themselves "The Legacy"; debuting in a two-on-three handicap match against Batista and Triple H. Orton began scheduling tests for The Legacy members, so they could prove themselves, and over two weeks, both Manu and Sim Snuka were kicked out.
On January 12, Snuka and Manu gave Rhodes the chance to align with them to attack Orton, along with the returning Ted DiBiase, but Rhodes refused. As they ambushed Orton, DiBiase instead joined with Orton and Rhodes to attack Snuka and Manu, and became a member of The Legacy. As part of The Legacy, Rhodes entered the Royal Rumble match in order to help Orton win, and lasted until the final three, before being eliminated by Triple H. Rhodes and DiBiase became involved in Orton's scripted rivalry with the McMahon family, helping him to attack Shane and Stephanie McMahon, and Stephanie's real-life husband, Triple H. Rhodes was also elevated to main event status as a result of joining The Legacy, competing in handicap and six-man tag team matches against Orton's opponents and rivals. On April 26, at Backlash, Rhodes, DiBiase, and Orton defeated Triple H, Batista, and Shane McMahon in a six-man tag team match, which, per the pre-match stipulation, resulted in Orton winning the WWE Championship. Rhodes suffered a minor neck injury in June, but did not need any time off to recover.Throughout mid-2009, Rhodes and DiBiase continued to compete against and attack Orton's rivals, especially Triple H. This led to Triple H reforming D-Generation X (DX) with Shawn Michaels, and DX defeated Rhodes and DiBiase at SummerSlam.Rhodes and DiBiase defeated DX at the following pay-per-view, Breaking Point in a submissions count anywhere match, but were defeated in a Hell in a Cell match at the Hell in a Cell pay-per-view in October, when Rhodes was pinned following a sledgehammer shot to the head. To sell the injury, Rhodes was taken out of the arena on a stretcher following the match. At the 2009 Slammy Awards hosted by Dennis Miller on Raw, he faced Kofi Kingston, which ended up in a tag match after Dibiase interfered.