"New Mutants Annual" #2 sees Betsy kidnapped by Spiral on the orders of the inter-dimensional creep, Mojo. As she is abducted, we learn her codename, Psylocke, for the very first time. The New Mutants rescue Betsy, with Doug Ramsey in particular getting close to her. Mojo gave her cybernetic eyes courtesy of his "Body Shop." Her first impulse was to tear them out of her skull, but could not bring herself to give up her eyesight once again. Brian visited her at Xavier's School for Gifted Youngsters, where Betsy decided to stay for a while.
Her timing wasn't exactly great, as she got there just in time for the Mutant Massacre to take place. Davis drew her second appearance with the X-Men in "Uncanny X-Men" #213, where she uses Cerebro (as the only telepath on the team at the time) when Sabretooth attacks. Psylocke proves herself to everyone by managing to stay alive against Sabretooth until her teammates showed up to help and then coming up with the idea of using an attack by Wolverine against Sabretooth to probe Sabretooth's distracted mind to gain information about the evil Marauders, the mutant hunters responsible for the Mutant Massacre. At the end of the issue, Psylocke become an official member of the X-Men.
While a member of the team, Psylocke had issues relating to her teammates and in the 1987 "X-Men Annual" #11, drawn by Alan Davis and Paul Neary, we see each of the X-Men's inner-most weakness. Psylocke's self-doubt centered around her seeming lack of emotions, making her feel like she was more robot than human. Soon afterward, Psylocke and the rest of the X-Men seemingly sacrificed themselves to stop the evil Adversary. Instead, the Omniversal Guardian Roma (a character from the pages of "Captain Britain") chose to resurrect the X-Men. The team decided to move to Australia and fight crime from a hidden base on the island nation (with a mysterious Aboriginal mutant known as Gateway supplying them teleportation to wherever they need to go to fight the bad guys). In "Uncanny X-Men" #232 (by Chris Claremont, Marc Silvestri and Dan Green), Psylocke, wary of how unprotected she was during battle, decided to adopt a new armored costume. The X-Men's stint in Australia was relatively short-lived, however, and by "Uncanny X-Men" #251 (by Claremont, Silvestri and Green), the team was down to just four members -- Havok, Colossus, Dazzler and Psylocke. When Roma brought the team back to life, she also provided them an option for a fresh start called the Siege Perilous. When Psylocke's rarely used precognition powers showed her the leftovers of the team being killed by the Reavers, she manipulated her three teammates' to enter the Siege Perilous and go their separate ways. Her actions likely saved her life and the lives of her friends.
In "Uncanny X-Men" #256 (by Chris Claremont, Jim Lee and Scott Williams), Psylocke visits Mojo's Body Shop and is turned into an Asian ninja, brainwashed into working for the Mandarin, even going by the name "Lady Mandarin" for a time before her former teammate, Wolverine, liberated her from the brainwashing. She joined up with Wolverine and Wolverine's traveling companion of the time, Jubilee, as they tried to put the X-Men back together. Claremont intended Betsy's transformation into an Asian ninja to be temporary, but it was so well-received (likely owing a great deal to how Jim Lee drew her in the storyline) that it became her new status quo. At this same time, she also began using her telepathic powers in a new way. She basically "weaponized" her telepathy, creating a psychic energy knife. In Uncanny X-Men #271 (by Claremont, Lee and Williams), she first described the knife as the "focused totality of my telepathic powers," a phrase she used often enough that it soon became one of the better known cliches of the era.
The X-Men got back together and merged with X-Factor, which was made up of the original five members of the X-Men (Cyclops, Jean Grey, Beast, Archangel and Iceman). The large group of mutants decided to split into two "squads," a Gold Team and a Blue Team. Psylocke was on the Blue Team, along with most of the other most popular mutants of the era (Wolverine, Gambit, Rogue, Cyclops and Beast, with Jubilee often along for the ride). Around this same time, she and Cyclops began a long period of flirtation. If Jean Grey were to do her own Lemonade album, Psylocke would likely be considered "Betsy with the good, purple hair." The plot was always just meant to be a flirtation and nothing else, according to Fabian Nicieza, the writer of the "X-Men" ongoing series, which starred the Blue Squad.
Soon afterward, Psylocke met Revanche, who showed up in Betsy's original body! You see, Nicieza had missed the issue of "Uncanny X-Men" where Claremont had established that Betsy's body was altered into being Asian, so Nicieza decided to reveal that her original body was switched with the body of an Asian ninja mutant named Kwannon, who was now in Betsy's old body and calling herself Revanche. When he was informed of his mistake, he then revealed that they basically were spliced together, so there was no "original" body involved anymore. Kwannon soon developed the Legacy Virus and eventually died of it many years later.