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.

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 political relationships with ambitious U.S. Senator Walter Edge and Jersey City Mayor Frank Hague, while Eli and Chalky go to extremes to interrogate a local KKK leader.

On the day of the annual St. Patrick's Eve dinner, Nucky deals with Eli's oratory ambitions, as well as a group of disenchanted "Leprechauns". Feeling ignored by Nucky, a frustrated Margaret feeds Van Alden information. In Chicago, Jimmy copes with the aftermath of a vicious attack orchestrated by Torrio rival Charlie Sheridan.

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.