Baltimore Det. Jimmy McNulty finds himself in hot water with his superior Major William Rawls after a drug dealer, D'Angelo Barksdale who is charged with three murders, is acquitted. McNulty knows the judge in question and although it's not his case, he's called into chambers to explain what happened. Obviously key witnesses recanted their police statements on the stand but McNulty doesn't underplay Barksdale's role in at least 7 other murders. When the judge's raises his concerns at the senior levels of the police department, they have a new investigation on their hands. Lt. Cedric Daniels is put in charge with Kima Greggs as the lead detective. As for Barksdale, he finds himself demoted to a low-level dealer after his arrest and he obviously has to prove himself yet again.

Lt. Daniels puts his team together but the extra help he's asked includes several less than stellar officers. It also includes McNulty, who is obviously in the doghouse. When one of the witnesses against D'Angelo Barksdale is found dead, McNulty and his homicide partner 'Bunk' Moreland bring him in for questioning. They have no evidence that he had anything to do with the killing but their instincts tell them otherwise. When news of the witnesses death hits the press, Major Rawls is convinced that McNulty is again responsible. Three of the newly assigned detectives, Hec, Prez and Carver decide to go to the towers and flex a little muscle only to have it turn into a major disaster.

Avon takes care of Omar's man Brandon but Wallace, who saw Brandon in the arcade, isn't too comfortable when he sees what they've done to him. Avon gives D'Angelo and Wallace a bonus for their good work. The police meanwhile get authorization to place taps for the pay phones used by D'Angelo and his crew but can only listen in when one of their suspects is using it meaning they'll have to keep the phones under constant observation. McNulty is in a tight spot when Major Rawls gives him a week to report back to his old job. When he realizes the connections McNulty's made in the various shootings, he announces he's going to arrest the Barksdales for murder and threatens to mess up the drug investigation.

Burrell reluctantly sides with Daniels in the disagreement with Rawls, giving the detail more time to make a case against Avon, despite his fears the operation is beginning to sprawl. McNulty and Pearlman present the detail's findings to Phelan, who signs an affidavit for a further thirty days of electronic surveillance. Using information from the wire on the pit pay-phones, the detail catch a runner on his way to the pit with a re-up. However, they elect not to arrest the driver, Anton 'Stinkum' Artis (Brandon Price), so as to avoid giving up their evidence in the charging documents. Stinkum's apparent free pass from the police convinces Avon and Stringer that their operation has been compromised, and Stringer introduces a new set of operating procedures. Rawls gives Det. Michael Santangelo (Michael Salconi) a choice; acquire information that he can use against McNulty or solve some of the department's open homicides, whilst the owner of Avon's strip club, Wendell 'Orlando' Blocker (Clayton LeBouef), has a proposal for D'Angelo. Meanwhile, Bubbles and Johnny attend an NA meeting, and Bubbles is moved by a speech given by recovering addict Walon (Steve Earle). Investigating the murder of the witness in D'Angelo's trial, with some help from Omar, the detail target Barksdale hitman Marquis 'Bird' Hilton (Fredro Starr).

McNulty uses his children to tail Stringer after a chance encounter in a local market, with one of them getting his license plate. As the detail discuss the implications of the pit pay-phones being disconnected, speculating the crew are going to start using phones outside their immediate area of operations, Herc and Carver prepare for the sergeant's exam. Stinkum, Roland 'Wee-Bey' Brice (Hassan Johnson), and Savino Bratton (Chris Clanton) raid Omar's pad, but he is nowhere to be found. Avon is unhappy when he learns of Orlando's proposal to D'Angelo. Meanwhile, Greggs and Carver arrest a driver picking up a large amount of cash from the towers, but are surprised to learn he is an aide to State Senator Clay Davis (Isiah Whitlock Jr.). Burrell is furious with this turn of events and confronts Daniels about the direction in which the case is heading, giving him one week to charge Avon and/or Stringer. Phelan, however, tells Burrell he wants the full thirty days of surveillance assigned by the court. As Wee-Bey and Stinkum attempt to take over new territory, they encounter an unanticipated problem.

Avon, Stringer and Wee-Bey discuss how best to deal with Omar after the attempted hit on Avon, deciding to let him think they want peace, whilst secretly planning to kill him. As such, Omar and Stringer meet for a parley, with security provided by Prop Joe. Meanwhile, Stringer insists on decreasing Avon's visibility in light of the detail's attempt to follow him after the basketball game. An irritable Phelan signs an affidavit for the new phone being used by the pit crew, and Pearlman tells McNulty that he is not up for automatic re-election, possibly because of the feathers he has ruffled due to his involvement with the Barksdale case. D'Angelo tries to understand why Shardene has left him, and after being clean for three days, Bubbles gets some advice from Waylon, before turning to Greggs for support. Meanwhile, McNulty attempts to flip Wallace, and the detail identifies Barksdale's main stash house. However, when Orlando's attempt to purchase weight gets him a lot more than he bargained for, Burrell sees an opportunity for a dangerous undercover operation.

While Greggs' life hangs in the balance, the entire department attempts to hunt down Savino. When Wallace flips, willing to testify that Stringer, Wee-Bey and Bird killed Brandon, Daniels stashes him in his grandmother's house on the outskirts of the city, but he soon becomes restless. Stringer tells Wee-Bey he needs to get out of Baltimore until the Savino investigation cools off, while Avon considers his next move. When McNulty and Pearlman try to pressure Levy into giving up Savino, he proves smarter than they gave him credit for. Meanwhile, when the detail's hand is forced, and a series of city-wide raids are ordered so as to appease Burrell's desire for "dope on the table," McNulty goes to see Phelan for help, but is surprised at his reaction. Daniels decides not to raid the main Barksdale stash house, but when word of his plan gets back to Burrell, he realizes there is a snitch in the detail. Elsewhere, Bubbles finds it increasingly difficult to stay clean.

Due to the camera at Orlando's, the detail gather enough information to arrest Avon and many of his people, but, with Wallace dead, they are unable to bring charges against Stringer, who's left on the street. However, disgusted that Avon and Stringer had Wallace killed, D'Angelo flips on the entire organization, giving the detail more information than they could have ever hoped for. As Daniels figures out who the snitch is in the unit, Herc is shocked when he is passed over for promotion in favor of Carver, who scored lower on the sergeant's exam. In Philadelphia, Wee-Bey is arrested and gladly admits to murder after murder. Finally figuring out why Avon has been buying vacant properties in the city, Daniels, McNulty, Freamon and Pearlman take their evidence of political involvement to the FBI. Meanwhile, D'Angelo's mother, Brianna (Michael Hyatt), attempts to convince him to stand with the family.

Detective Jimmy McNulty finds the body of a woman floating in the water while carrying out his new assignment of Harbor Patrol. Major Valchek has his gift to a local parish trumped by Frank Sobotka, his rival in the local stevedores union. And on the waterfront, a shipping container destined for 'The Greek' bakes in the sun with perishable cargo.

Major Valchek gets back at Sobotka for the church gift fiasco, and a feud begins. Avon Barksdale continues to run his empire from a prison cell. On the waterfront, Port Police Officer Beatrice Russell gets stuck investigating the contraband in the The Greek's container. McNulty lends a hand with the investigation.

Weak product in the pit has Bodie getting heat. Homicide detectives hand out grand jury summonses to stevedores involved in the homicide case, and Port Police Officer Beadie Russell works the lingering affections of an old boyfriend to find out how cargo disappears from the docks.

Bodie's disastrous sales efforts result in a tongue lashing from Stringer Bell. Ziggy pulls Johnny Fifty into a new caper that makes the Greeks pay big money. McNulty goes undercover in a brothel. As Valchek fumes over the change of targets and Burrell pulls the rug from beneath him, Daniels and Pearlman maintain their composure.