It's New Year's Eve 1922. Gyp Rosetti is introduced as a violent, easily offended Sicilian mobster from New York City. During a meeting with Nucky, he receives some bad news regarding his new exclusive partnership with Rothstein. In retaliation, he racially insults everyone in the room and storms out. Nucky attends meetings and deals with Margaret's past, which made him an involuntary philanthropist when she donated millions of dollars' worth of New Jersey landholdings. On the lam, Van Alden wor
Eli gets out of jail and has trouble accepting his brother's plans for him and the new reality at home. Nucky meets 'special investigator' Gaston Means, acting as Harry Daugherty's bagman in New York. Displeased by Nucky's refusal to sell alcohol to anyone but Rothstein, Gyp takes over the strategically situated small town of Tabor Heights, New Jersey and blockades the alcohol shipments between Atlantic City and New York. Margaret's interest for the sanitary conditions at St. Theresa's hospital
Disturbed by a recent nightmare and Billie’s absence, Nucky reluctantly joins Margaret to receive a high honor from the Church. Meanwhile, Gyp makes a deal with Nucky for a onetime liquor shipment, though the mobster’s longtime intentions remain very much up in the air. Van Alden regrets trying to socialize with his co-workers; Margaret takes her women’s-clinic pitch to a higher authority; Lucky and Meyer (Anatol Yusef) protect their investments; Richard sets the record straight with Mickey, and
Owen's increasingly prominent role in the bootlegging operation is resented by Nucky when they both end up hiding out in the house of a precocious liquor thief. Capone, whose son is being bullied at school, takes out his frustrations on one of O'Banion's men. Charlie Luciano sits down with Masseria, who muscles a high tax on Lucky's growing business and tells him to be wary of his Jewish partners. Mickey receives a menacing phone call from Rothstein. Ignoring Nucky's instructions and Eli, not to
Van Alden comes clean with his nanny Sigrid but this backfires when they are visited by a Prohibition agent, forcing him to return to O'Banion's place. Margaret suffers setbacks while trying to promote her Women's Health clinic. Gillian seeks Leander's counsel in financing her bordello, for which she must either change her business model or let go of the past. Nucky enlists a reluctant Eddie Cantor to help Billie move up in the world. An attempt is made on Gyp Rosetti's life.
Nucky maneuvers to avoid taking a political fall for the Attorney General, getting arrested in the process. Eli and Mickey visit Tabor Heights. Richard befriends an older veteran and his daughter, Julia. Gillian takes on a young lover, who she names "James". While her son longs for a male presence in the house, Margaret rekindles an affair with Owen.
Nucky, Eli and their families bond over Easter dinner. Richard takes young Tommy to dine with the Sagorskys and Julia accepts Richard's invitation to the local Carnival. In danger of reprisal over his actions in Tabor Heights, Gyp brokers a deal with his boss, Joe Masseria. Gillian comes to murderous terms with the death of Jimmy.
Arrangements are made for Nucky to attend a private club, where he makes a proposal to the Secretary of the Treasury, Andrew Mellon. Torrio, back from Italy, gives Al a larger role in the business. Nelson, indebted to O'Banion, is forced to work for him after hours, while at the same time facing problems in his day job. Nucky and Billie argue about the nature of their relationship. Margaret decides to take a stand on birth control and looks for a birthday pony with Owen's help. Gillian cuts ties
Taking refuge in the Ritz, a concussed and feverish Nucky struggles to be the man in charge while fighting memory lapses from the concussion, with the help of his family and closest accomplices, while they plan his next move. Gyp returns to Tabor Heights and starts his own import operation with the blessing of Joe Masseria. Richard takes Julia to a dance and Gillian blames him for Tommy's latest misadventure. George Remus is arrested for violation of the Volstead Act.
Nucky and Owen plan a move against New York, pursuing Masseria first. A middle-man who could expose both Nucky and the Attorney General is targeted. Nelson's new sales job gets him into trouble with Capone. Richard and Julia's relationship takes a step forward. After being rejected by Rothstein, Luciano and Lansky go into business with Masseria. Margaret reveals to Owen that she is pregnant with his baby but before they can run away he is killed by Masseria's men.
Gyp and his crew move into Atlantic City. Nucky goes on the run while his wife disappears with her children. Nucky and wounded Eddie turn to Chalky for help; Chalky has a stand off with Rosetti. Lansky advises Luciano to be cautious in their new heroin operation. Gillian turns on Richard, evicting him from the house. Eli brings Capone back from Chicago with him as an ally in Nucky's fight to hold onto his empire.
It's a full-scale war in Atlantic City and bodies are piling up on both sides. Based in a lumber yard, Nucky seeks to weaken the Rosetti–Masseria alliance while struggling to keep peace between Capone and Chalky. In New York, Luciano is framed by Masseria and Rothstein with the aid of fake police. Gillian makes a failed attempt to woo, drug and presumably kill Rosetti. Nucky strikes a deal with Rothstein to break Rosetti's power. Chalky and Capone's army massacre Masseria's men as they are retre