February 1924. Nucky, preferring to stay in his room up in the Albatross Hotel and away from the boardwalk, comes to a peace agreement with Masseria and Rothstein. Richard, on his way home to reunite with his sister, leaves some corpses in his wake. Gillian, still an addict but desperate to get her grandson back, is resorting to prostitution until a stranger shows up with a better offer. Revenue Agent Sawicki's new partner, Warren Knox, isn't as naive as he acts. Chalky tries to coolly run the Onyx Club, but his right-hand man, Dunn Purnsley, gets into a mess of trouble with a booking agent and his wife.
Chalky is pressured by Valentin Narcisse, a Harlem kingpin who knows what Dunn did. At home, Van Alden must deal with his stubbornly middle-class wife; at work, he has to deal with an angry Al Capone. Knox's true boss, it turns out, is J. Edgar Hoover. Before he leaves for Florida to visit an old friend, Nucky has to placate a frustrated Eddie and gives him a promotion. Valentin Narcisse puts an end to the conflict with the booking agent's wife by having her killed by his men.
While in Tampa visiting Bill McCoy, Nucky becomes intrigued by Sally Wheet, a local bar owner. Roy has Gillian pretend to be his wife. Narcisse meets with Rothstein and, later, books singer Daughter Maitland for the Onyx Club. For a party at college, Eli's son Willy tries to finagle some booze from Mickey's warehouse. Richard finds himself in some trouble and his sister comes to his aid.
Federal agents close in on Nucky's ring. Narcisse recruits Dunn. Val Alden learns that Al and Frank Capone are more brutal jokers than O'Banion. Willy's revenge prank goes horribly wrong. Rothstein's way of dealing with his bad luck at the card table leads Nucky to make Lansky his partner in the Florida scheme. After a night on the town with Ralph Capone, Eddie pays for it in the morning when he's arrested by Knox.
Knox torments Eddie and reveals his dark past, pushing him to betrayal. Willy, arrested over the death of schoolmate Henry Gaines, phones Nucky. Gillian, desperate to regain custody of Tommy but losing her grip, turns to Dunn for a fix. Van Alden's enlisted by Frank and Al Capone to bust some Democrat supporters' heads; Frank's gunned down by deputized Chicago agents. Nucky has Willy stick to a false alibi, pays off the Philadelphia DA to free him, and leaves him with some avuncular advice shortly before Willy's roommate is arrested for Gaines' death. Eddie, back at the Albatross and guilt-ridden about betraying Nucky's trust, jumps out of his window to his death.
Nucky and Margaret have a strained meeting at Penn Station before he travels down to Florida. While investigating Eddie's death, Eli finds Eddie's key for the safety-deposit box at the bank, but isn't allowed access to it. Richard returns and comes across Paul Sagorsky after he's just received stark news from his doctor. Chalky draws closer to Daughter Maitland. Knox, pretending to be a Prohibition agent again, returns to Mickey's warehouse but can't escape Eddie's shadow. In Tampa, Nucky, Lansky, and Luciano meet with a new partner whom Bill's brought in. Julia tells Richard what she needs. Nucky gets into more than just business with a feisty, hard-drinking Sally.
As news of Leopold and Loeb's arrest hits the papers, Al Capone, still in a raging grief over Frank's death, kills a policeman. Rothstein runs into Margaret at her work, which is not entirely above-board. Dunn deals with the church's concern about his heroin in the community. Willy drops out of college - infuriating his father - and turns to Nucky for work. After Johnny Torrio's arrested in a police raid on a distillery that he just bought from O'Banion, he gives Capone the go-ahead to kill the Irishman. Roy helps Gillian kick her habit but confesses to an obsession of his own. Agent Knox is actually Jim Tolliver, as Gaston Means has secretly known all along. Daughter Maitland reveals that her true allegiance is to Dr. Narcisse - not Chalky - for horribly personal reasons.
Tolliver hears about Willy's evasion of the law and pursues Eli as his means to ending Nucky's empire. Chalky busts up one of Narcisse's drug houses, with two-faced Dunn along for the show. Nucky's unpleasantly surprised when Sally rides up to Atlantic City with the new bootlegging delivery from Tampa. Narcisse employs Daughter Maitland to waylay Chalky, but she can't bring herself to let Dunn kill Chalky and she stabs Dunn fatally in the back instead.
Gillian opens up to Roy; Julia proposes to Richard. Eager to assert his power at home, Van Alden tells Capone he'll kill O'Banion, but old business gets in the way. Narcisse punishes Daughter for her betrayal, pushing Chalky towards a war Nucky refuses to join. After other mobsters kill O'Banion at his shop counter, Van Alden takes $1000 over his dead body. Rothstein negotiates an insurance plan with Nucky. Chalky's daughter Maybelle discovers her father's affair with Daughter. Newlywed Richard asks Nucky for a job.
Sally discovers heroin being slipped into shipments by Luciano and Lansky, at Masseria's behest. Chalky fails to kill Narcisse and is wounded. Margaret does an insider-deal for Rothstein in return for new lodgings. Capone, while trying to nudge Torrio into retirement, is saved by Van Alden from a tommy-gun ambush. Despite Tolliver's turning of Eli, Hoover's still uninterested in scotching the bootleggers' network. Nucky is forced into a deal with Narcisse after learning he is Masseria's partner on the heroin pipeline. Nucky promises Chalky to Narcisse but tells Mayor Bader to have cops slip Chalky out of town; too late, though, he discovers through Willy that Bader is in Narcisse's pocket. Chalky and Daughter narrowly escape the cops' clutches; Narcisse eyes Maybelle; Nucky, Eli, and Willy gather to decide the Thompsons' next move.
Chalky and Daughter arrive at Havre de Grace to stay with Oscar Boneau, his old mentor. Gillian says goodbye to Tommy and looks forward to a life with Roy when he proposes to her. Knox pressures Eli to set up a meeting between the East Coast bosses in the network. Chalky wakes to find Daughter gone; some of Narcisse's men descend on the house, killing blind Oscar before being killed by his men. Gillian is tricked by Roy, who is actually a Pinkerton agent, into confessing to her killing of Roger. Nucky agrees to the peace-brokering meeting that Eli suggests but he realises Knox is the "skunk in his cellar" that Gaston Means had referred to in a phone call, and that he's turned Eli.
Chalky confronts Nucky at gunpoint and demands they get rid of Narcisse. Richard asks Nucky to disclose the location of Jimmy's body to keep Gillian in jail; in return, Nucky employs him for a hit. Richard sends Julia, Tommy, and Paul to his sister's. Nucky tells Narcisse that Chalky wants to meet. After an attempt on Torrio narrowly fails, he hands over his entire operation to Capone. Knox/Tolliver sets up an eavesdrop for the big meeting but no one shows; Eli's called to the Albatross, where Nucky puts a gun to his head until Willy intervenes. Tolliver confronts Eli in his home; they fight and Eli beats him to death. Chalky meets Narcisse at the Onyx but his bluff of providing Daughter's whereabouts is met by Narcisse's revelation that he has his daughter Maybelle. From his sniper position, Richard hesitates long enough that, when he pulls the trigger, Maybelle has moved to the table and into the shot; she is killed and Richard is mortally wounded by one of Narcisse's men. Narcisse is arrested and turned by Hoover into an informant on Marcus Garvey. Chalky retreats to Havre de Grace. Nucky sends Eli off to Chicago, where he is met by Van Alden. Richard, imagining his reunion with his new family in Wisconsin, dies peacefully under the pier.