Dr Thackery is Chief Of Medicine in a 1900 New York hospital, The Knickerbocker, battling a cocaine (and opiate) addiction, high mortality rates and bureaucratic corruption to save lives in a world before antibiotics and blood transfusions.
Cornelia worries that no one at the hospital takes her seriously but her father assures her she's up to the task. She learns that close friends have been admitted to the hospital with typhoid. Dr. Edwards is living in a rundown hotel but his office is no better - they've put him in the hospital basement.
An old friend of Thackery's, Abbie Alford, arrives at the hospital seeking his help. She has lost most of her nose as the result of syphilis, which she acquired from her now absent husband. Thackery agrees to perform a skin graft.
Dr. Edwards is finally invited into the surgical theater but Thackery makes it clear that he's only there to guide Dr. Gallinger through the procedure. Herman Barrow is making money any way he can including selling bodies. Cleary tells Sister Harriet they will be working together from now on and he will be finding her future clients.
Gangster Bunky Collier shows up at the Knick after one of his pimps is shot in the leg. Thackery is called in to perform the surgery and is surprised to find Edwards there at that early hour. Barrow uses the opportunity to get a reduction in what he owes. Edwards is still performing surgeries at night and experiments with silver thread as sutures. He's called to the Robertson home when his mother falls ill.
Having lost yet another patient while performing a Cesarean section, Thackery develops a completely new method to reduce the bleeding and invites Bertie Chickering to help him experiment. Their new method works quite well. The Gallinger's baby is in hospital but declining rapidly. At the funeral, Mrs. Gallinger refuses to accept her daughter's death.
Thackery's affair with Nurse Lucy Elkins continues. Bertie continues to pursue her. There is a shortage of cocaine due to the war in the Philippines and attacks on shipping. It has a detrimental effect of Thackery who goes into withdrawal. Fortunately, Lucy has a small supply but it's insufficient to his needs.
The Knick continues its slide into wrack and ruin, instigated by the recent riot and the cocaine shortage. Dr. Thackery is caught in a compromising position and Lucy in her efforts to help him begins her descent into possible hell as well. Dr. Thackery's secret addiction is no longer so secret after he commits an act of desperation.
Thackery's drug habit is catching up with him. He is growing increasingly paranoid as he is unable to perform even when under the drug's influence. When he learns that Dr. Levi Zinberg is studying the properties of blood so that it can be typed and safely transfused, he sets out to find a solution before him.