It's January 1920. On the eve of Prohibition, Nucky Thompson, Atlantic City's Treasurer, condemns alcohol at a Women's Temperance League meeting. This is where he is noticed by Margaret Schroeder, a pretty, pregnant housewife who comes to him for help in getting her abusive husband, Hans, a job. Later that evening, the duplicitous Nucky privately tells his ward bosses about the opportunity to make huge profits selling bootleg liquor. At a countdown-to-midnight blast at Babette's Supper Club, he assures Jimmy Darmody, a recently returned WWI vet, that his appointment as "Man Friday" to the new Chief Clerk of the Fourth Ward, Paddy Ryan, will lead to bigger things. Jimmy, meanwhile, has higher aspirations and ends up making an alliance that may have dire consequences for both him and Nucky.

Straight-laced, uptight Agent Nelson Van Alden investigates a crime which he feels has been pinned on a scapegoat, so pays a visit to Nucky and leaves convinced that the Treasurer is "as corrupt as the day is long." Nucky quickly does damage control, enlisting his brother, Sheriff Elias Thompson, to close ranks with their underlings. Meanwhile, in Chicago, Al Capone shows a local reporter what he thinks about accusations that Johnny Torrio was involved in the killing of local mobster "Big Jim" Colosimo. Back in Atlantic City, Nucky discusses the upcoming election with Commodore Louis Kaestner, his aging mentor, with whom he debates the women's vote issue. Later, before heading out for a night on the town, Nucky chews out an angry Arnold Rothstein over the phone, then meets privately with Margaret Schroeder, who asks him for help in providing for her children. As a long day ends, a traveling salesman named George Baxter, in town for a few days with an unwilling young beauty named Claudia, makes a startling discovery while on the road home to Baltimore.

An unlikely witness threatens to expose the perpetrators of the woods massacre, sending Eli – and Agent Nelson Van Alden – rushing to the hospital. As Nucky re-evaluates his relationship with Lucy, Margaret starts a new job at an upscale French dress shop at the Ritz. Chalky's team pays a heavy price for taking over Mickey Doyle's bootleg operation, causing Chalky to reevaluate his relationship with Nucky. After questioning Angela's loyalty, Jimmy heads west.

In Chicago, Jimmy bonds with one of Johnny Torrio's prostitutes, Pearl, and finds himself increasingly at odds with the hot-headed Al Capone. Back in Atlantic City, Nucky looks to leverage his relationships with ambitious U.S. Senator Walter Edge, as well as Jersey City Mayor Frank Hague. Eli and Chalky go to extremes to interrogate a KKK member; Lucky Luciano sets his sights on Jimmy's "wife"; Margaret impresses at Nucky's lavish birthday party, while Lucy tries to protect her territory.

On the day of the annual St. Patrick's Eve dinner, Nucky deals with his jealous brother's oratory ambitions, as well as a group of disenchanted "Leprechauns." Feeling ignored by Nucky, a frustrated Margaret feeds Van Alden information regarding the whereabouts of a garage filled with barrels of beer. In New York, Arnold Rothstein worries about his involvement in the fixed World Series, while in Chicago, Jimmy copes with the aftermath of a vicious attack orchestrated by Torrio rival Charlie Sheridan.

After the brazen robbery of one of his ward bosses, Nucky turns up the heat on Lucky Luciano. An emboldened Margaret stands up to Lucy at the dress shop, then accepts an offer from Nucky to change her circumstances. In Chicago, Al Capone's frustration over family issues spills over into his relationship with Jimmy, who scores points with Johnny Torrio for a bold power play involving mob heavy Charlie Sheridan and the neighborhood of Greektown.

After his father Ethan is injured in a fall, Nucky uses the opportunity to refurbish his childhood home. During a visit to an army hospital, Jimmy befriends disfigured vet Richard Harrow, whose sharp eye may prove invaluable. Chalky considers a liquor proposition that would eliminate middle man Nucky. Van Alden gets a valuable lead on the woods massacre. Angela finds companionship in Jimmy's absence; Luciano and a friend cut a deal with the D'Alessio brothers. On a double-date with new friend Annabelle and her beaux, Margaret tries to get Nucky to open up about some painful childhood memories. On a tip from Capone, Jimmy eyes payback against one of Sheridan's thugs.

Nucky visits Chicago for the Republican National Convention, where he finds himself intrigued by the candidacy of Warren G. Harding over more established candidates. The D'Alessio gang moves in on Nucky's territory at the expense of Eli, who has been watching over his brother's affairs. Margaret finds herself entangled in Nucky's business affairs, while Van Alden struggles with his wife's desire for a child. Rothstein prepares for legal trouble over his role in fixing the 1919 World Series. Nucky asks Jimmy to return to Atlantic City to reinforce his position.

Nucky is forced to readjust his political alliances with a Democratic mayoral candidate promising to wipe out corruption. Jimmy returns from Chicago to deal with the D'Alessio gang, which has allied with Rothstein to import European scotch through Atlantic City, but is arrested by Agent Van Alden for the massacre in the woods. Margaret intercedes with Nucky on Madame Jeunet's behalf, while Angela finds her romantic and artistic ambitions halted by Jimmy's return.

Nucky asks for Margaret's assistance in backing his mayoral candidate with the passage of women's right to vote, leaving her conflicted about her role. Doyle switches sides back from Rothstein, which leads Nucky to conspire with Chalky against Lansky and the D'Alessios. Angela witnesses Jimmy's violent side against her photographer friend, and considers leaving Atlantic City for good in the aftermath. Van Alden grapples with his emotions, and has encounters with both Margaret and Lucy.

Nucky has emotionally charged conversations with both Margaret and Eli over his business and the killing of Margaret's husband, leading to dramatic shake-ups in his personal and political lives. Jimmy meets with his dying father for the first time in years, and in the process reevaluates his relationships with both his parents. Van Alden and Agent Sebso's working relationship is pushed to the limit by Van Alden's suspicions, ending after a definitive confrontation at a river baptismal. Angela prepares to flee from Jimmy to Paris, but learns her support system is not as strong as she believed.

Nucky faces Election Day in Atlantic City and pulls out all the stops to keep power in Republican hands. Torrio brokers a discussion between Nucky and Rothstein to resolve their growing gang war, as well as Rothstein's looming federal indictment over the World Series. Both Jimmy and Eli voice their growing resentment towards Nucky, and find they have an ally in the Commodore. Van Alden seeks a sign on whether or not to leave Atlantic City, but receives unexpected news from Lucy. Margaret weighs new information about Nucky's first marriage and her uncertain future to make a final decision on her role in his life.