Misinterpreting one of Cordy's visions, Angel tries to help a pregnant woman and accidentally kills her demon protector. Now, Angel must fulfill the dead warrior's mission and fight a battle to save the woman's unborn baby. When the woman runs off though, Angel is forced to make an incredible sacrifice to find her again... He has to sing at a karaoke bar.
After running across it, Angel is vaguely familiar with an abandoned building, the Hyperion hotel. At his request, Wesley and Cordelia discover that Angel used to be a tenant in the hotel in the 1950s. At that time, Angel was pulled into a sticky situation with a woman hiding her past which lead to an unfortunate end. In the present day, Angel and the team attempt to rid the hotel of its demons.
Darla is back from the dead and determined to drive Angel crazy. She's invading his dreams and disrupting his sleep, knocking him off his game. Meanwhile, Cordy gets a vision that Gunn may be in danger and goes off to help him. Gunn is annoyed with her interference. When they're confronted with vampires and a demon, though, Cordy and Gunn need to work together.
After Cordelia receives a vision, Angel befriends a young girl from out of town at the risk of his safety. Bethany, running to L.A. to escape a tragic family life, has telekinetic abilities out of her control which she desperately wants to shed. Unfortunately, Lilah and Wolfram & Hart have insidious plans for Bethany's powers. As Angel works to help her reign in her powers, he receives nocturnal visits from the newly resurrected Darla which affect his abilities.
After spotting Darla walking around LA, Angel becomes convinced that his sire is alive. Wes and Cordy think that he's imagining things, but Angel is determined to find Darla and discover what she's up to. Little does he know that Darla is working with Wolfram and Hart. Angel tracks her down, and quickly falls into their trap.
Realizing his obsessions have climaxed, Angel embarks on a journey of enlightenment with the help of a swami. Cordelia is threatened by an assailant looking for Angel until Wesley steps in and assumes his boss' role. Wesley, as Angel, is tasked to protect a prominent businessman's daughter whose life is threatened. Everyone is shocked when Wesley makes a very personal connection to the client.
Angel continues to search for Darla. A series of flashbacks shows Darla life and unlife; from her first death in 1609, to her relationship with Angelus, to their breakup during the Boxer Rebellion. Her newly restored humanity weighing on her, Darla finally reaches an important decision that horrifies Angel.
When Gunn's cousin becomes involved in a plan to rob a museum, it's up to the gang at Angel Inc. to help him get out of it. The robbers are after the Shroud of Rahmon. Going undercover with the demon thieves, Angel and Gunn are soon in over their heads. The Shroud has magical powers that turn people crazy. Soon it's infecting all of them, even Angel. Angel's relationship with Detective Kate Lockley is both bettered and worsened when she intrudes on the heist.
Darla is informed from Lindsey and Holland that there was an unfortunate side effect to her rebirth. Angel, learning of Darla's terminal condition, embarks on a mission to save her. Lorne directs Angel to a challenge which might restore Darla's health but at the cost of his life. Angel completes the challenge but Darla cannot be saved again because of her previous resurrection. Feeling broken, Angel tries to comfort Darla in her final stage until Lindsey shows up with an unexpected visitor.
Angel is desperate to find Darla before she rises as a vampire. Unfortunately, Drusilla is working with Wolfram and Hart to make sure that Angel can't stop Darla's "rebirth." The gang at Angel Inc. becomes more and more concerned about Angel's growing darkness. Especially, when he makes a drastic and controversial decision regarding some Wolfram and Hart lawyers.
After firing his friends, Angel sets off on a mission to stop Dru and Darla. Wes, Cordy and Gunn are feeling lost and hurt. They end up at Caritas and eventually discover that they just might be able to make it on their own. Meanwhile, Lila and Lindsey deal with the aftermath of being the only two survivors of the wine cellar massacre.
Wolfram and Hart are sponsoring a fund raising benefit for a local teen shelter. Angel is suspicious of their motives and starts investigating. Meanwhile, Wes, Gunn and Cordy work to establish their own detective business.
Gene is a brilliant physicist, smitten with love, who is on the verge on discovering a method of manipulating the time and space relationship. One night at karaoke, Lorne discovers that Gene has no future past the next day as well as the rest of the world. Lorne and Angel set out to prevent Gene from freezing time around the world to preserve his fractured relationship. Meanwhile, Cordelia, Wesley, and Gunn establish their own private investigation firm and stumble upon an intricate case involving a wealthy family and a demon.
Anne, head of the teen shelter, seeks assistance from Gunn, Wesley, and Cordelia when she learns of kids in the area being harassed by police officers. It seems a frustrated police chief in a bad part of town initiates a new program to combat rising violence on the streets: resurrecting officers killed in the line of duty. Unbeknownst to the others, Angel and Detective Lockley attempt to track down the zombie officers' puppet master. In the process, Wesley is shot and badly wounded by one of the officers. Angel however cannot bring himself to visit his former employee.
As the Wolfram and Hart 75 year review draws near, Angel sees an opportunity to bring the whole company down. He is determined to get to the law firm's home office and destroy the senior partners. But, what he discovers has him hitting rock bottom. Meanwhile, Kate is fired from the police force, driving her to do something drastic.
Angel has an epiphany which has him questioning his actions over the past few months. Meanwhile, the three eyed demon clan is after Gunn, Wes and Cordy. It's up to Angel to save them... If they can all start trusting him again.
With a reevaluation upcoming for his department, Lindsey is referred to a clinic where he is able to receive a donor hand. Lindsey is shocked to discover that his hand has a mind of its own, jotting nefarious notes on its own accord. Meanwhile, the Angel Investigations crew follows up on a vision Cordelia has in which a man, who recently received a transplant eye from the same clinic, stabs himself. Lindsey and Angel's paths cross as they realize they are investigating the same matter. They discover the clinic is using donor body parts from a cache of unwilling ...
When a demon from Lorne's home dimension of Pylea arrives in LA, Lorne goes to Angel for help. The demon came through a portal and, as Team Angel investigates, they find evidence of more portal activity around the city. When Lorne's cousin arrives from Pylea, he joins in their hunt for the demon. Unfortunately, on his journey home again, he accidentally picks up an unexpected hitchhiker...
After Cordy is swept through a portal, Angel and Wes are desperate to get her back. They come up with a plan to go to Pylea after her. Since it's Lorne's home dimension, they insist that he come along. Gunn is hesitant to go when Wes says that they might never be able to get back to earth. Meanwhile on Pylea, Cordy is sold as a "cow" and meets up with another portal refugee, Fred. Then Cordy has a vision and things become even more complicated for her.
Wes, Gunn, Angel and Lorne find Cordy in Pylea. She's being hailed as a princess because of her visions. Now, she's the ruler of the kingdom. While, Wes and Gunn try to find a way to open another portal and return home, Lorne visits his family. Angel is becoming incredibly popular with the locals, telling them tales of his battles back on earth. He even rescues Fred from certain death. But things quickly start to go wrong for everyone. Cordy realizes some disturbing things about her new responsibilities. Angel begins to lose control of his vampire self. Wes and Gunn ...
The season two finale has Team Angel desperate to escape Pylea. Wes and Gunn join up with the rebel forces, Cordy tries to save Lorne, and Angel has to overcome the demon inside of him. If they're ever going to get back to LA, they're going to have to overcome their individual problems and work together as a team.