It’s early 1963. Lane Pryce, the financial officer installed by Sterling Cooper’s British parent Puttnam, Powell, and Lowe, demoralizes the staff with mass layoffs and pits Ken and Pete against each other as co-heads of account services. Calling Don Draper “the face of our business,” Lane sends him and Sal to Baltimore to mollify client London Fog. There, Don witnesses Sal in a compromising situation with a male bellhop.

Back in New York, client Pepsi requests a sexy riff on the musical Bye Bye Birdie for a television commercial for their new diet cola, Patio. Peggy questions whether this approach will appeal to female consumers, though she later imitates the routine herself. Paul, meanwhile, insults Madison Square Garden executives for wanting to demolish the architecturally significant Penn Station. At Lane’s request, Don smoothes things over, but PPL subsequently orders the account dropped anyway. “Why the hell did you buy us?” Don asks. “I don’t know,” Lane replies.

In Ossining, Betty‘s ailing father Gene moves in with the Drapers. He and Sally bond over the book The History of the Decline and Fall of the Roman Empire. “You just wait. All hell’s gonna break loose,” Gene warns Sally.

Roger, frustrated that his friends and colleagues don’t accept his young wife Jane, throws a lavish country club party. There, Don and an older male guest named Connie reminisce about their modest beginnings. Elsewhere at the party a man asks permission to touch Betty’s pregnant belly; he’s later introduced as Henry Francis, an aide to New York governor Nelson Rockefeller. After Jane gets drunk, Don tells Roger that people think he’s foolish for marrying her.

When the Patio commercial’s director drops out, Don recommends that Sal replace him. Sal opens up to his wife, Kitty, about his fear of failure, disconcerting her when he minces through the commercial’s choreography. Though the client rejects the commercial, Don congratulates Sal on proving himself as a director.

Gene, meanwhile, upsets Betty by reviewing his will. When he suddenly dies, Sally protests that no one cares he’s gone forever and begins acting up in school. Don and Betty meet with her teacher, Suzanne Farrell, to discuss Sally’s grief.

Back at work, Lane’s cost-cutting exasperates Don, while Duck Phillips courts Pete and Peggy for his current agency, Grey. Pete, despite being reprimanded for suggesting that client Admiral Television target African-Americans, immediately rebuffs Duck. Peggy, however, contemplates the offer and later accepts Duck’s romantic overtures.

Betty goes into labor. A dream about her father inspires her to name the newborn Eugene. Don objects — “He hated me and I hated him,” he tells Betty — but she holds firm.

One day, Ken roars into the office atop a riding mower – he’s landed the John Deere account. Saint-John Powell arrives the following day to introduce Lane’s replacement, Guy MacKendrick, who slights Roger by leaving him off Sterling Cooper’s new organizational chart. Also omitted is Joan, who resigned in anticipation of her husband, Greg, becoming his hospital’s Chief Resident. When Greg gets passed over, it’s too late to reverse course. At Joan’s raucous going-away party, Lois loses control of Ken’s mower and shreds Guy’s foot. Saint-John reinstates Lane.

“Connie” from Roger’s party turns out to be hotel magnate Conrad Hilton, who offers Don his business. Connie’s lawyers stipulate that Don sign an employment contract with Sterling Cooper, but Don refuses. Roger goes behind Don’s back and asks for Betty’s support. Don eventually signs, but insists on no further contact with Roger.

Betty solicits Henry’s help to block a local development project. He helps her stall the development, then later kisses her. Betty starts writing him letters and hosts a Rockefeller fundraiser for him, but Henry does not attend. “You had to come to me,” he explains the next day. “You’re married.” They kiss, but Betty rejects as “tawdry” the idea of carrying things further.

Sal too is forced to rebuff a romantic advance – from Lucky Strike executive Lee Garner, Jr. Working late one night, Lee wraps his arms around Sal, and upon being denied demands that Sal be sacked. Don complies, explaining that Lucky Strike could shut off Sterling Cooper’s lights.

One morning, Don gives Sally’s teacher Suzanne a ride home. He begins an affair with her, using Connie’s frequent requests for late-night conferences as a cover. Betty uncovers a bigger deception, however, when she finally unlocks Don’s desk drawer and finds the dog tags of Richard Whitman and the real Don Draper, the deed to Anna Draper’s house, and the divorce decree dissolving Anna’s marriage to Don.

Betty leaves town with the kids. Don and Suzanne plan a quick trip, but it gets canceled when Betty returns early to confront Don about his secret life. Shaken, he reveals his impoverished past and the consequences of his identity swap, among them his half-brother Adam’s suicide. “Would you love you?” Betty asks. “I was surprised that you ever loved me,” he says.

By November 1963, Pete has lost the competition with Ken, who is appointed sole head of accounts. The same afternoon, President Kennedy is shot in Dallas. (Duck conceals the news from Peggy until after they make love.) Despite the assassination, the wedding of Roger’s daughter Margaret takes place. Henry arrives late, and he and Betty eye each other furtively. The two meet the following day, where Henry tells Betty, “I want to marry you.”

Connie meanwhile tips off Don that McCann Erickson is purchasing PPL. Don wants to buy back Sterling Cooper, but when this proves unfeasible he, Roger, and Cooper persuade Lane to sever their contracts. They and Lane form a new agency with Lucky Strike as the chief account. Pete and Harry sign on, as does an initially reluctant Peggy. Joan, who handles logistics for a weekend raid of client paperwork and layouts, also joins the new Sterling Cooper Draper Pryce.

Betty tells Don that she wants a divorce. Don threatens to ruin her and take the children, but later relents. “I hope you get what you always wanted,” he says. While Betty and Henry jet off to Reno for the divorce, Don moves into a Greenwich Village apartment.