One month after the Fall of Los Angeles was reversed, the city is still recovering from its time in hell. Angel is adjusting to his newfound celebrity status, while fending off assassin attempts from the former Demon Lords. He wishes to re-open Angel Investigations, but finds that his friends are too busy rebuilding their personal lives; he eventually re-establishes the detective agency with the help of Kate Lockley. Connor also takes part in his father's business, and in turn Gwen assists to try and earn Connor’s forgiveness after her betrayal in hell. The team initially operates out of an abandoned church before returning to their old base, the Hyperion Hotel. Angel finds business frustrating at first, since many cases turn out to be either assassination attempts or people wanting to meet their hero. One such assassin, a Mayan Jaguar Warrior named Dez, joins the team after betraying the Lord of Sherman Oaks; she helps the team investigate a bizarre case of animals being transformed into humans. The team gains another new member in James, who claims to be a Potentate, a race of warrior angels for the Powers That Be who were dispatched during the Fall. James helps Angel in defeating his fellow Potentates when they begin killing humans who are destined to commit evil in the future.
Meanwhile, Gunn lies comatose in hospital, after having his humanity restored by the temporal fold. Illyria watches over him, protecting him from those wishing to do him harm. Gunn is eventually awoken by Non, who plans to force Gunn to join her, but she is quickly defeated by Illyria and deposited at the Mosaic Wellness Center. Gunn and Illyria bond over their struggling humanity, and move into Fred’s apartment together. They later travel to Fred’s home town in Texas to attend her uncle’s funeral; Illyria wishes to explore Fred’s past and her own humanity, while Gunn wants to comfort Fred’s parents. In Texas, they encounter Angel’s old enemies, the Scourge, who use the Mutari generator to resurrect Baticus, an Old One and Illyria’s former pet. Illyria battles and defeats Baticus while Gunn executes the members of the Scourge. Their enemies dead, the pair make their way back to Los Angeles.
Back at Angel Investigations, Angel and Groosalugg travel to the San Diego Sci-Fi Festival to recover the Flaming Sword, a mystical weapon up for auction. At the convention, Angel sees a preview for the film Last Angel in Hell, an inaccurate depiction of Los Angeles' time in hell, starring Nicholas Cage as "Angel Cartwright". He also meets Spike and his friend Jeremy, who fall victim to a spell which turns everyone at the convention into their costumes. Spike is transformed into Angel, but it is the real Angel who ends up reversing the spell. Afterwards, Spike becomes a more active member of Angel Investigations, as does Betta George. Gunn and Illyria also rejoin the team after returning from their road trip. However, the team suffers an unexpected loss when Lorne sacrifices himself to save the entire multiverse; three entities, Discord, Disharmony, and Cacophony, attempt to shatter the Music of the Spheres, until Lorne uses his singing ability to stabilize reality. In doing so, he becomes "one with the universe" and watches over his friends from a new plane of existence.
Angel is kidnapped by Innovation Labs, a corporation which sells immortality by turning its clients into vampires. They plan to use Angel to manufacture vampires with their souls intact, keeping him imprisoned in steel-reinforced medical plaster. Meanwhile, Connor appoints himself leader of Angel Investigations in his father's absence, but struggles to assert authority; Gunn in particular clashes with Connor and leaves the team to reform his old vampire-hunting crew. Connor must also deal with the arrival of the Sisterhood of Jaro Hull, a cult of female demons supposedly devoted to him. Illyria tracks down and releases Angel, who destroys Innovation Labs with the help of former Watcher Laura Weathermill and her partner Polyphemus; afterwards, Laura invites herself and Polyphemus to join Angel Investigations. While on a drunken night out, Spike gets dragged into Tansy Fry's plans to reform the Order of Aurelius and open a "mini-Hellmouth" in Los Angeles. Fry invites Spike to join the Order as he, like her, shares the Master's bloodline. He refuses and promises to put an end to her plans. This experience brings Spike into contact with Eddie Hope, a human who had been recruited as a devil during the Fall of Los Angeles; since the city's restoration, Eddie had been tracking down those who had commited evil in hell. Spike and Eddie team up to defeat Fry and her minions, and successfully close the Los Angeles Hellmouth.
While settling in at Angel Investigations, Laura quickly exposes James as an evil higher power named Myresto Mor, who plans to turn the Earth into a demon breeding farm. When Gunn is captured by Eddie, who plans to kill him for his actions as a vampire, Angel Investigations arrive and reclaim their teammate, taking Eddie prisoner. However, Eddie escapes while being transported back to the Hyperion; reflecting on his mission as a devil, he decides to change and return to his family. James summons a Soul Eater named Liss, who attacks Angel Investigations and kills Dez before being decapitated by Angel. Before dying, Liss accuses Spike of being soulless, although Laura later determines that his soul is simply corrupted by a parasite. While all this occurs, James begins his plans to impregnate the human race with demons, starting with Anne's homeless teen shelter. Connor is kidnapped by the Sisterhood of Jaro Hull, who drain his blood in a ritual to become stronger. Angel Investigations unite to rescue him, but it is Connor himself who defeats the demons by exhibiting a new ability to turn his enemies to dust. During a heart-to-heart with his son, Angel realises he is holding him back and decides to go travelling alone, leaving Connor officially in charge of Angel Investigations. Spike also leaves to find his own identity, taking George with him, while Kate returns to being a police detective.
Seeking answers about her own nature and purpose, Illyria leaves the team to go on a personal quest. Spike advises her to return to the Deeper Well, and helps her on the initial stages of her journey. Upon arriving at the Well, Illyria regains her powers and embraces her humanity, but unleashes the Old One Arsgomor in the process; she uses her powers to give Arsgomor a second chance by regressing him to a fetal state. Meanwhile, Connor moves Angel Investigations to new offices while the agency continues to look into James' activities. Anne comes to them for help, having been impregnated by James, just as the team hears news from Kate about Angel's apparent death in a car explosion. Meanwhile, Gunn starts to consider Connor a threat when Polyphemus reveals that the Sisterhood's ritual is transforming him into a higher power similar to James. With information and weaponry attained from Wolfram & Hart, Connor leads his team in confronting James at his facility, but they are quickly outmatched and Polyphemus is killed.
Meanwhile, following his car accident, Angel wakes up in a dystopian future in which James has succeeded and the entire Earth is a demon factory. He is met by Darrow, the Wolfram & Hart lawyer responsible for bringing him to the future, and a time-travelling Illyria. Despite their reservations about trusting Wolfram & Hart, Angel and Illyria accept their help in order to defeat James. However, when they find him, James has been killed by his sister Rowant so she could reclaim Earth as her own. Darrow uses the Vanishing Gem - capable of killing a god - against Rowant, but is betrayed and killed by his colleague Mendoza. Illyria returns Angel to the present with the Gem, where he uses it against James. Connor then uses his new powers to transport Anne's baby into James, killing him but leaving the baby unharmed. Anne decides to raise the baby, who Angel realises is the Darrow he met in the future. Angel later confronts Wolfram & Hart at their L.A. offices, and tells them to get out of his town. He then resolves to do whatever he can to prevent a future as bad as the one he witnessed.