In 1964, Sister Jude runs the Briarcliff Sanitarium with an iron hand. But things may go beyond her control when the sanitarium physician conducts secret experiments on their most recent inmate: a gas station attendant nicknamed Bloody Face who decapitated and skinned three woman.
Farmers bring their demon-possessed son to Briarcliff and Monsignor Howard prepares for an exorcism. Meanwhile, Grace tries to persuade Lana to accept Kit's help in their escape attempt, and Dr. Arden goes on a date.
Kit and Grace plan an escape during a unhappy storm as Sister Jude hosts a movie. Meanwhile, Lana approaches Thredson for help, Sister Mary Eunice enjoys her newfound freedom, and Sister Jude is haunted by her past.
A patient claiming to be Anne Frank is committed to Briarcliff. Meanwhile, Word of Arden's assault on a prostitute gets out, but Sister Jude is more interested in the fact that he has Nazi memorabilia... and Anne claims that she saw Arden Auschwitz. Also, Thredson offers to get Lana out if she consents to be killed, and Kit discovers the truth about Grace.
Sister Jude goes to a Nazi hunter for help, but soon learns that 'Anne Frank' isn't what she claims. Meanwhile, Thredson convinces Kit to confess so that he can help him, and Lana makes plans to escape.
A mother abandons her daughter at Briarcliff over Sister Jude's objections, and the child soon finds a friend in Mary Eunice. Meanwhile, Monsignor Howard discovers what Dr. Arden has been up to, and Lana finds out about Bloody Face's origins.
A Dark Angel is called to Briarcliff but the possessed Sister Mary Eunice disagrees. Meanwhile, Sister Jude is tormented by the memories of her past and Kit escapes from custody to rescue Grace.
Sister Mary Eunice uses a mental patient who dresses as Santa Claus and kills to eliminate those who threaten her. Meanwhile, Arden seeks out an ally and Lana seeks out Kit.
Emerson turns over a new leaf, while Lana gets some shocking news from Sister Mary Eunice. Meanwhile, Arden and Kit join forces to learn who-or what-abducted Grace's inactive person.
Monsignor Howard turns to Jude for advice, while the ex-nun recovers from electroshock therapy. Meanwhile, Thredson returns to Briarcliff in a new position and plots to get ahold of his forced confession tape, and Kit is reunited with Grace.
Thredson reunites Kit and Grace, and threatens Kit's child if the inmate doesn't turn over the psychiatrist's confession tape. Meanwhile, Jude's plea to Mother Claudia yields results and Lana has a final confrontation with Bloody Face.
A tale in three parts: 1) Alma, Grace, and Kit try to make a life for themselves. 2) Judy discovers that her sanity is slowly slipping away. 3) Lana makes a life for herself as a writer but receives a visitor from her past.
Johnny finally meets his biological mother, Lana, as she gives an interview on her career as an investigative reporter.