Tommy Carcetti discusses Major Howard "Bunny" Colvin's Hamsterdam project with his campaign manager Theresa D'Agostino. Colvin had set up tolerant zones away from residential areas where the drug trade was allowed to continue unchallenged. Carcetti wonders if Colvin's initiative is a step in the right direction. D'Agostino wants Carcetti to consider how his knowledge can help them win in the upcoming mayoral race. Carcetti believes that Royce is holding off on shutting down the Hamsterdam zones to come up with a story claiming that it was part of an enforcement strategy.
Mayor Clarence Royce meets with public health academics and his state's attorney Steven Demper. He continues to pursue the idea of continuing the Hamsterdam project under a banner other than drug legalization. His Chief of Staff, Coleman Parker, walks out of the meeting to show his disgust at the mayor for not acting swiftly to disown the project and blame the police department.
Deputy Commissioner William Rawls and Colonel Raymond Foerster quiz detective Bunk Moreland about his latest case. Bunk is investigating the murder of drug kingpin Stringer Bell in a property development site. He reports that his colleagues Crutchfield and Massey are working the crime scene while Detective Ed Norris is traveling to the morgue to watch the post mortems. Detective Vernon Holley interviews the only witness to the shooting - Bell's development consultant Andy Krawczyk. Rawls tells Bunk that Krawczyk is a major campaign contributor to the Mayor and the politicians have already been checking up on him. Holley quizzes Krawczyk about his knowledge of Bell's narcotics crimes. Krawczyk states that the gunman he saw appeared to be a large black male with a large weapon, Bunk sees this as a stereotypical witness statement and remarks BNBG. Holley explains that this means "Big Negro, Big Gun."
Bunk enters the building and asks the crime scene tech to rush the ballistics comparison. Detectives Jimmy McNulty and Kima Greggs from the Major Case Unit watch the photographer at work, despondent because they had just gathered the evidence they needed to arrest Bell. McNulty tells Bunk that he had caught Stringer and admits his disappointment at not being able to let Stringer know. Bunk gives McNulty cell phone chips that he found among Stringer's effects. Bunk tells McNulty that Sergeant Jay Landsman is preparing a warrant for Stringer's address.
Bunk and McNulty collect the warrant and search Stringer's home. McNulty gets a call from Colvin to arrange a meeting. Once inside Stringer's apartment McNulty, looking at Stringer's book collection which includes The Wealth of Nations by Adam Smith, is shocked by how little he knew about his suspect.
Avon Barksdale, despondent over Stringer's death, refuses to talk to his lieutenant Shaun "Shamrock" McGinty at their funeral home base of operations. Slim Charles arrives and is met by the angry soldiers of the organization. Bodie Broadus tells Charles that he is ready to go after Marlo Stanfield himself. The assumption that Stanfield is responsible is widely held because of his ongoing turf war with the Barksdale organization. Charles talks to Avon about Stringer's death. Avon tells him that Stringer died for reasons beyond his control and that it had nothing to do with the Stanfield organization. Avon confesses that he has lost interest in the war with Stanfield but Charles tells him that they must continue now that they have started the war stating that if Marlo's crew killing Stringer is a lie, "we fight on that lie."
Major case unit
At the Major Case unit headquarters Lester Freamon and Greggs man the wiretaps and note that on the wiretaps Marlo Stanfield is being blamed for Stringer's murder. Freamon anticipates an increase in the intensity of the Barksdale-Stanfield turf war. Greggs reports that McNulty has gone to search Stringer's home with Bunk and that he took Stringer's death as he would the loss of a relative.
McNulty meets with Colvin and learns that he is on permanent leave. Colvin gives McNulty the location of Avon's wartime safehouse, the tip he received from Stringer before his death. McNulty delivers the cell phone chips and other things from Stringer's home to his colleagues. Leander Sydnor observes that the cell phone chips explain why Stringer never used the disposable cell phones provided to the rest of the organization. McNulty takes Freamon aside and tells him about the Barksdale safehouse. Freamon realizes that Stringer must have given the tip to Colvin. Freamon phones lieutenant Cedric Daniels who is at a public speaking opportunity with his wife Marla. Marla and Cedric are estranged but he is maintaining the facade of a healthy marriage to support her political dream of becoming a city councilwoman. Sydnor watches Marla on television in the detail office and remarks to Assistant States Attorney Rhonda Pearlman about the lieutenant's wife becoming a politician. Pearlman is forced to bite her tongue about her own relationship with Daniels. Greggs is also having relationship problems - after her day at work she has a one night stand and ignores a phonecall from her partner Cheryl.
Bunk and McNulty spend the night drinking together and Bunk notices that McNulty seems to be cutting back his alcohol intake. Bunk speculates that Omar Little was involved in Stringer's murder on the basis of the shotgun shells found at the scene. He believes that they will match the casings from the double homicide of Tank and Tosha Mitchell where he also believes Omar was involved. McNulty tells Bunk that it may have been Marlo Stanfield rather than Omar. Bunk worries that the murder rate is spiraling out of control. Bunk urges McNulty to drink more, but instead he takes Bunk home. Cheryl phones McNulty to find out why Kima has not returned home and he covers for her.
Freamon meets with the suspended detective Roland "Prez" Pryzbylewski early in the morning at a park. Prez worries over the review board's decision about his mistaken identity shooting of another police officer. He states that the Vanguard (the BPD's association of African American officers) has voted against him with 6 out of 10 black officers believing that Prez is a "racist asshole". Freamon urges Prez to fight the charge joking that 4 out of 10 officers think he is just an "asshole". Prez jokes that he has always been guilty of failing to properly identify himself as a police officer and tells Freamon that he is not meant to be a police. Freamon asks what career he was meant for.
Freamon arrives late for the unit meeting about the Barksdale safehouse. Daniels is reluctant to move against the safehouse on the basis of an anonymous tip because he feels he does not have probable cause. McNulty becomes impatient and, knowing that Colvin will go along with it now that Stringer is dead, reveals that Stringer was the informant. Daniels orders the unit to continue to monitor the wiretaps but to also prepare a warrant for the safehouse. Sydnor and Greggs begin surveillance of the safehouse immediately.
On the wiretap the unit record Slim Charles phoning in Stanfield's location. Charles has tracked him to Vinson's rim shop. He orders his soldiers to prepare to strike against Stanfield. This prompts the unit to move against the safehouse. Shamrock tells Avon about the opportunity and urges him to take part. Once Shamrock and Avon arrive at the safehouse Daniels confirms there are at least ten suspects inside based on surveillance. He calls for backup before moving in. Instead of the tactical response unit Daniels is met with Sergeant Ellis Carver's Drug Enforcement Unit squad. Thomas "Herc" Hauk tells Daniels that the tactical unit are too busy cleaning up the free zones to offer assistance.
Daniels orders his men to knock before entry as he believes a frontal assault will be met with heavy resistance. Inside Gerard reports to Avon that Stanfield is still at the rim shop but his bodyguards have left him with minimal protection. As they talk the raid begins. Avon orders Perry not to shoot at the police and tells Gerard to let the police in. Perry tries to claim that weapons are all his. McNulty tells Avon that he will serve the rest of his original sentence for the parole violation at the very least. Avon refuses to be afraid of the prison time offering his old adage that he will serve two days, the day he goes in and the day he gets out. McNulty shows Avon the search warrant, carefully pointing out the source of the information, Stringer Bell.
The arrested criminals are taken to the homicide department to be interviewed. Freamon is greeted by Bunk and shows him Greggs interviewing Shamrock. Poot Carr, Squeak and Bernard are among those arrested on the basis of the wiretaps and Squeak berates Bernard for his stupidity. He remarks that he cannot wait to go to jail. McNulty and Pearlman interview Bodie and he claims entrapment because he was selling in the free zone.
Stringer's killers, Omar Little and Brother Mouzone, arrive at Mouzone's motel room. Mouzone's bodyguard Lamar is there holding Omar's boyfriend Dante hostage. Mouzone turns Dante over to Omar and also gives him his weapon to dispose of telling him that he trusts him to do it properly in his hometown.
Stanfield meets with his advisor Vinson at his rim shop. He informs Vinson of Stringer's death and Vinson wonders who could have reached Stringer to murder him. Vinson tells Stanfield that Avon will blame him. Stanfield's soldier Chris Partlow remarks that the notoriety will be good for them. Later, Stanfield soldier Snoop brags to lieutenants including Fruit that she was there when Partlow killed Stringer. Marlo, Chris and Vinson eat dinner at the rim shop unaware that the Barksdale organization came close to striking against them. When they leave Slim Charles is forced to acknowledge that he missed his shot.
Sergeant Ellis Carver discusses the effect breaking the story of Hamsterdam will have on the career of Colvin and his men with other officers from the district. As Carver makes his way through Hamsterdam Johnny Weeks approaches him and asks to borrow money. Carver recognizes Johnny as a drug addict and refuses, and Johnny accepts this graciously. The next morning reporters arrive in Hamsterdam. Commissioner Ervin Burrell learns of the media involvement and tells his colleagues Rawls and Major Bobby Reed. Rawls and Reed remain concerned that Royce will blame the police department for the Hamsterdam debacle.
Soon after the press arrive Carcetti and Anthony Gray begin to give interviews about the project. Gray announces his intentions to run against the Mayor. Banisky, the reporter that Colvin put off earlier remarks to a colleague that he could have broken this story a week ago. Detective Hauk and Officers Lloyd "Truck" Garrick and Anthony Colicchio watch the press film Hamsterdam in full swing. In his office Royce sees the footage and realizes it was a mistake to try to sustain the Hamsterdam zones.
Burrell arrives at the Mayor's office to discuss their course of action. Parker tells Burrell that they plan to blame him for Hamsterdam and then relieve him of his post. Burrell responds by blackmailing the Mayor, threatening to go to the press and claim that the creation of Hamsterdam was created under pressure by the Mayor to keep crime down, and that the Mayor thwarted Burrell's attempt to shut Hamsterdam down. Burrell offers an alternative - make him commissioner for a full term and he will blame Colvin as much as possible and take the rest on himself and the police force. After his meeting Burrell orders Rawls to close down the free zones. Rawls executes his order with some relish leading the troops to a sanctioned area at the military charge song Ride of the Valkyries playing in the background. Herc is pleased to be able to take action at last while Carver is less positive.
As night falls Hamsterdam is emptied of addicts and drug dealers. Rawls tours the area with Parker and promises to have the buildings demolished overnight so that the press will have nothing to stand in front of. In one of the derelict buildings an officer has discovered the body of Johnny Weeks. Rawls orders for Johnny to be moved in a prisoner transport vehicle so there will be no ambulances for the reporters.
Dennis "Cutty" Wise meets with his old flame Grace Sampson outside of the school where she works as a teacher. Cutty tells her about his plans to open a community boxing gym. The two reminisce but Grace rebuffs Cutty's advances. She tells him that she is proud of him before leaving.
Cutty shows a video of Muhammad Ali's first fight against Floyd Patterson to young boxing enthusiasts at his fledgling gym. Justin loses interest and begins to train on a punching bag. Spider calls Patterson soft and Cutty tells them that any boxer who makes it to the end of a round cannot be called soft as a rule.
After the Hamsterdam zones are closed down and Avon is arrested, Cutty finds that many of his young boxers stop attending the gym because there is work for them selling drugs for Marlo Stanfield. Cutty tracks Justin down and finds him eating chips. Fruit arrives and shares an awkward silence with Cutty. Justin promises to be at the gym at 3:30. Fruit orders his dealers to get back to work.
Colvin is refused his post as Deputy Director of Security for Johns Hopkins after Burrell personally phones his employers, telling them about Hamsterdam. Colvin faces further humiliation from Burrell and Rawls. They insist that he take full responsibility for his actions by accepting a demotion to Lieutenant, and thus a smaller pension, in order to protect Colvin's people. Rawls ensures that Colvin accepts by threatening to refuse promotions and find discharge and discipline excuses for any of Colvin's shift supervisors as they are part of his district. Rawls and Burrell relieve Colvin of duty at their next comstat meeting and make Administrative Lieutenant Dennis Mello the acting commander. The Mayor also faces financial difficulties over Hamsterdam - the U.S. Deputy Drug Czar visits to tell him that they are considering cutting almost half a billion dollars in federal funding for Baltimore and will interdict any attempts to support a geographical entity within the United States where drugs are legal. Royce tries to reassure him that the Hamsterdam zones were the result of one rogue police commander and manages to keep the department's funding.
Royce meets with State Delegate Odell Watkins who urges him to fire Burrell over Hamsterdam. Due to Burrell's threats, Royce refuses to let Burrell go. He tries to appease Watkins by offering support for Marla Daniels's run for a city council seat, knowing that Watkins is mentoring her.
Carcetti plans his next move with D'Agostino - difficult questions will face Burrell at the next Public Safety Subcomittee hearing. At the meeting Carcetti lets Gray ask the most penetrating questions as D'Agostino advised him. Burrell is true to his promise and places the blame firmly with Colvin. Carcetti refuses to accept their excuses and makes a speech about his inability to forgive the way that West Baltimore has been neglected. After Carcetti's speech Watkins is congratulatory. Gray realizes that Carcetti is also planning to run against Royce and feels betrayed.
Daniels reports the success of his case to Burrell who then refers to him as "Major Daniels". Surprised at the belated promotion, Daniels is told by Burrell that his promotion has been accepted due to the Mayor's alliance with his wife Marla and that with the Western District vacancy, he will be named District Commander immediately. Daniels celebrates the promotion with a public meal with Pearlman. Daniels tells Pearlman that now that Marla has the Mayor's support she doesn't need him. Later they have sex while, across town, Cutty works out his frustration on a punching bag.
McNulty visits the Western District and talks to Colvin. Colvin jokes that his wife, Lolita, has lost weight and got a real estate license so she must be planning to leave him. McNulty thanks Colvin for the information on Avon and tells him that Stringer is dead and Avon has been arrested. McNulty assures Colvin that he thinks he is good police. McNulty visits Beadie Russell next and tells her that he is ready to pursue a relationship. She asks what happened to prompt him to visit her and he struggles to explain it. Eventually he settles by saying that he has finished something and confesses that he feels that the qualities that make him a good detective also make him wrong for everything else. Beadie invites McNulty in for a drink, but he declines. Instead, McNulty asks to meet her kids.
Daniels follows up on his promise to McNulty that he would have to leave the unit once the Barksdale case was over, although he appears willing to allow McNulty to stay on if McNulty will promise to remain loyal in the future. Daniels is surprised when McNulty accepts the dismissal readily, admitting that he would be better off doing something else. McNulty tells Daniels he plans to return to the Western District as it feels like home.
The season closes with a montage of scenes: Herc and Colicchio arrest young dealers; Gray campaigns for mayor; Carver, Santangelo, and a uniformed and contented McNulty attend a rollcall briefing in the Western; the Hamsterdam zones are reduced to a pile of rubbish; Carver visits Cutty's gym and finds him training young boxers; Crutchfield cuts Bunk's tie off as he sleeps at his desk; Donette cries over the men she has lost while Tyrell plays with his toys; Omar throws his weapons into the Baltimore Harbor near the docks where there are still posters of Frank Sobotka; drug dealing continues throughout Baltimore; Bodie walks the streets alone; Daniels and Sydnor take down the Barksdale investigation board; Carcetti also begins his campaign for mayor as his family watches him give a speech; McNulty walks his beat in the Western and greets members of the community he polices; Brianna Barksdale attends Avon's trial but walks out when he looks at her, Chris and Marlo also arrive and Avon finally sees and acknowledges his adversary; Pearlman prosecutes Avon along with Barksdale Organization members Shamrock, Poot, Perry, Gerard, Sapper, Herbert De'Rodd "Puddin" Johnson, Arthur Carroll and others, all defended by Maurice Levy.
A coda follows the montage. Bubbles picks through the wreckage of Hamsterdam with his new young protÃ©gÃ©. Colvin stands amid the demolished buildings and Bubbles greets him. When Colvin asks if Hamsterdam was a good thing, Bubbles tells him he doesn't know.