It's 1966 and the Civil Rights movement is gaining pace while Vietnam continues. Don is crazy over new wife Meagan as she prepares a surprise party for his 40th birthday. Roger is busy trying to undermine Pete who feels he is holding the agency together. Lane is working hard to keep things on budget in Joan's absence. She is struggling with the loneliness of motherhood while Peggy tries to adapt to Don's new relaxed attitude to work.
Betty has gained weight and Henry's mother advises her to use diet pills. Her doctor finds a lump on her thyroid. Mohawk return to SCDP and Pete suggests that Roger manage the account. Peggy is tasked with hiring a new copy writer and she picks Michael Ginsberg an idiosyncratic but talented young Jewish man. Don and Harry try to hire the Rolling Stones to record a jingle for Heinz.
The mass murders of Richard Speck hit the news and cause a stir at SCDP. Roger pays Peggy to work on Mohawk designs. She finds Dawn scared to go home and so takes her in. Michael Ginsberg angers Don by pitching his own idea to a client. Don is ill and heads home after running into an ex-lover. Joan welcomes Greg home but is angry to learn that he is returning to Vietnam.
Pete and Trudy have Don, Meagan, Ken and Cynthia over for dinner. Lane meets a new friend at the pub who offers the ad account for Jaguar to SCDP. Lane tries to bring him in alone but fails and Pete, Roger and Don step in. They end up at a whorehouse. When Lane finds out he is outraged and when Pete insults him he challenges him to box.
Don drags Meagan to a Howard Johnson's for the weekend, leaving Peggy to do the Heinz pitch without him. It doesn't go well and she is so frustrated that she blows off work to go to the movies. Roger has dinner with Jane's friends and takes LSD with them. Don and Meagan have a bad fight and he drives off leaving her at the Howard Johnsons. When he returns, she is gone.
Abe asks to meet Peggy for dinner. Joan suggests he might be about to propose but instead he asks her to move in with him. She agrees and they arrange a dinner to tell her mother. Don is preparing to be given an award for his New York Times Ad criticising the tobacco industry. Meagan's parents are visiting and Sally wants to go too. Roger is excited to use the opportunity to get new clients. Meagan comes up with a new idea to pitch to Heinz.
Meagan secretly goes for an audition for a play. She confesses to Don and asks if she can leave work. He is sad to see her go but agrees. Pete chats with one of his neighbours (Howard) on the train about the affair he is having. Later he runs into Beth, Howard's wife, and they sleep together.
Don sees some of Ginsberg’s drawings and it inspires him to come up with a pitch for “Sno Balls.” The office is split as to whose design is better but Don decided to take his to the meeting. Roger asks Ginsberg to come up with a pitch for a Jewish wine which Bert brings to him. Roger asks Jane to come to the meeting and they end up sleeping together. Betty is struggling with her weight loss and is hurt to see a slim Meagan in her fancy apartment. She lashes out by telling Sally about Anna Draper.
Lane is being charged several thousand dollars to make up for tax he didn’t pay back in the UK. He takes out a loan for the company and claims it is a budget surplus. However Mohawk airlines faces a strike, and after forging a cheque, he realises he won’t get his bonus. Joan is served divorce papers and Don takes her out to take her mind off it. Paul Kinsey calls on Harry. Paul is now a Hare Krishna and in love with a woman called Lakshmi. He gives Harry a Star Trek script he wrote hoping he can sell it. It’s awful and Lakshmi seduces Harry, trying to persuade him to leave Harry alone. SCDP will be working through the Christmas holidays on a pitch for Jaguar cars.
Don is working hard on the Jaguar pitch with an all male team. Peggy is left in charge of all other business. Herb Rennet, the head of the Dealer’s Association, asks if he could spend a night with Joan in exchange for favouring the SCDP pitch. Pete takes the offer to Joan and cajoles the other partners (except Don) into making her an offer. Lane suggests she ask to become a partner. She goes through with it despite Don’s objections. The pitch is won but Peggy leaves. After consulting with Freddy Rumsen she takes a job with Cutler, Gleason and Chaough.
Bert finds the forged cheque and Don fires Lane. Lane returns home and his wife has bought him a Jaguar. He hangs himself in the office. Sally makes such a fuss over not wanting to go skiing that Betty drops her off with Meagan. Don and Meagan are out at work on Monday and so leave Sally alone. She calls Glenn and invites him over. They go to a Museum and she gets her period. Don pushes hard for a meeting with Ken’s father-in-law Ed Baxter (Dow Chemical). At the meeting he almost rants about how people are never happy.
Meagan’s mother is in town but refuses to encourage Meagan’s fledgling career. The opportunity comes up for Meagan to audition for a commercial with one of SCDP’s clients. She asks Don to help her and initially he refuses. He is nursing a bad tooth and begins to see his brother Adam around the office. Peggy is given the chance to work on a cigarette campaign at her new office. Don gives Lane’s wife his stake in the company back. SCDP consider moving upstairs to a larger office.