January 1920. On the eve of Prohibition, Atlantic City's Treasurer, Nucky Thompson, condemns alcohol at a Women's Temperance League meeting, 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 could have dire consequences for both him and Nucky.

Nucky deals with the fallout from Jimmy's rogue heist, sending Eli to sow the seeds of doubt in the mind of Margaret, who seeks help in the wake of her husband's demise.

An unlikely witness to the woods massacre threatens to expose the perpetrators, sending both Eli and Van Alden rushing to the hospital. Margaret starts a new job at an upscale French dress shop at the Ritz, while Chalky's team pays a heavy price for taking over Mickey Doyle's bootleg operation.

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 and accepts an offer from Nucky to change her circumstances. In Chicago, Al's frustration over family issues spills over into his relationship with Jimmy, who scores points with Johnny Torrio for a bold power play involving Sheridan and the neighborhood of Greektown.

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 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.