When Isaac's dad is killed, Isaac is arrested and there's a full moon coming. Scott and Derek check out his house while the Argent's send someone to the jail to deal with what they suspect is the town's newest werewolf. Meanwhile Jackson makes arrangements to film his first full moon since being bitten.
The lizard-like shape-shifter continues its killing spree with Stiles narrowly escaping twice, and saving Derek in the bargain. Allison's grandpa/principal attends his first lacrosse match and brings a surprise guest to dinner at the Argent house.
When it becomes apparent that Jackson is the Kanima, Scott chases him and rescues Allison's dad but is seen by her grand-dad. Scott and Stiles finally catch up with Jackson/the Kanima where he's stalking Danny in a gay club.
When Jackson escapes from the prisoner transport van that Stiles and Scott had him in, Jackson's father gets a restraining order to keep the two of them away from Jackson. Scott's mother searches his room and discovers that Scott has been having sex with Allison and lets her mother know. The gang learn that the Kanima may need to resolve some past trauma before it can fully transform into a werewolf so they begin to investigate Jackson's past.
Scott, with the help of his friends and Dr Deaton try to stop the kanima from claiming its next victim at an upcoming warehouse rave. While most of the Argent crew plan to intercept and kill the kanima, Mrs. Argent makes a plan of her own, but is surprised at the outcome.
Peter appears to Lydia in her dreams and convinces her to do something "special" for her birthday party this year, which just happens to fall on the full moon. Meanwhile Derek makes certain that his pack of new wolves are restrained for their first full-moon.
Scott and Stiles (along with their single parents) are trapped in the sheriff's department by the kanima and its controller. Outside the station, the Argents, under the direction of their new leader, come looking to end the kanima and Derek.
It's the night of the championship game and Scott is riding the bench as academically ineligible, meanwhile he must keep Gerard from unleashing the kanima on the unsuspecting crowd. Knowing that Scott will be busy, Allison and her father hunt down two of Derek's pack.
Following Jackson's apparent death on the lacrosse field, Scott and the others discover that he's not dead but may just be transforming into a more powerful form. As we finally learn Gerard's real plan, help comes to the werewolves from an unexpected quarter.