After Lydia regains consciousness, she's mobile enough to take a shower unassisted. As she's showering, the water in the tub starts changing to a filthy brown. She doesn't notice at first, until she's startled by a loud sound and looks down. She reaches into the brown water and pulls up a wad of hair that isn't hers. A bloody hand grabs onto her, and she screams It's her first real banshee scream, although no one recognizes it for what it is. Scott can clearly hear her from many miles away, though. She vanishes from the hospital, presumably through the open window in her room.
Two days later, Lydia finds Stiles and Sheriff Stilinski out in the woods at the scene of a murder. She's naked and shaking. The Sheriff gives her his coat while Stiles is unable to stop staring at her.
Lydia returns to school the next week. Allison tries to comfort her about all the stares she gets from everyone at school. She tells Lydia that they're just staring because she lost 9 pounds. Lydia gets her attitude on and struts down the hall like she doesn't notice the stares. During the day, she tries to thank Jackson for saving her when Peter bit her, but he doesn't want to hear it. He's not interested in getting back together with her and tells her so, even though she didn't ask.
A couple of days later, Jackson finds Lydia in the hallway and starts yelling at her because he thinks it's her fault that he hasn't become a werewolf. She has no idea what he's talking about and ends up running to the bathroom to cry. While there, she sees a man with bare feet. She follows him out of the bathroom and down the hallway, unable to see his face. He walks over to a trophy case and then walks away. Lydia goes to check the case and sees that he was looking at a trophy for Peter Hale. She remembers him from the night of the winter formal. That night, Lydia and Allison hang out at Allison's house. Lydia doesn't notice the Argents' new suspicion of her being a werewolf.
The following week, Lydia wakes up one morning and discovers blood all over her sheets. Her mother notices the slices on her hands, and they both look at the broken mirror in Lydia's room. Later that day, Lydia goes to see the guidance counselor. While she's waiting, a boy, later revealed to be Young Peter Hale, talks to her about why she's there.
In the counselor’s office, Lydia asks what qualifies Ms. Morell to be a guidance counselor when she’s a French teacher who isn’t even French, and Morell responds that she has a Masters in Behavioral Psychology and she’s done over three hundred hours of field work. Lydia responds with, “C’est pas bien” which roughly translates to “That’s not good enough.” Morell asks why she’s even there if she’s fine, and Lydia says she’s only there to appease her parents. The mysterious boy from before is watching her from the hall. They also talk about her friends before the session closes. Lydia comes up with the phrase "Because the ones closest to you can also be the ones holding you back the most," although she doesn't know where she heard it.
During that night's lacrosse game, Lydia sits out in her car crying. Stiles finds her and convinces her to roll down the window to talk, but then he leaves before she gets to say anything. He promises to come back but doesn't.
When Derek tries to determine who the kanima is, he first tries Jackson. Jackson passes the test, so Lydia is next, given that she is the only other person to have received an alpha bite and not turned into a werewolf.
As she's watching a student at the board during Economics, Lydia sees him change into Peter Hale. The writing on the board is in a revenge spiral. Everyone is staring at her. Then suddenly all the students are gone, and Peter turns around to face her. He throws desks across the room as he comes at her, and she jumps up with a cry and backs against the wall. Peter walks up to her, crushing something in his hand, and then blows a white powder in her face.
Lydia comes out of her vision crying, with Coach Finstock calling her name. She's up at the front of the room, and she's written ɘmqlɘʜɘnoɘmoƨ (Someone Help Me) all over the board. Young Peter Hale is sitting in the class just a few desks away from Stiles watching her. Finstock asks if someone would like to try answering in English, and everyone laughs.
Isaac and Erica are supposed to test her during Chemistry. Scott and Stiles sit next to her when class starts, but Mr. Harris explains that they're going to do a group experiment with rotating partners. Lydia sees Erica touching Scott's leg during class and asks Allison if it's true that she never gets jealous. She can't imagine being okay with someone doing something like that.
Allison advises Lydia to not talk to Erica or Isaac, but she doesn't say why. Everyone switches, and Scott takes the seat next to Lydia. Harris rings the bell for them to switch again, and this time Isaac sits next to Lydia. Stiles tries to get up to intervene, but Harris slaps him with a pointer. Harris rings the bell and announces that if they've done the experiment correctly they should have a crystal that they can eat. Isaac offers Lydia the crystal with a drop of kanima venom on it. Scott sees the drop and jumps up to tell her to stop, but he's too late and the drop doesn't seem to affect her, so he sits down. Lydia eats the crystal and shows no signs of being paralyzed.
Lydia goes back at the guidance counselor's office. Ms. Morell holds up a series or Rorschach tests and Lydia says that they're all butterflies. The final one, however, looks to her like Peter's burned, bloody head. Ms. Morell asks her what it will take to get her to open up, and Lydia replies that she's as honest and open as a person can be.
She is unaware that there is a plot against her or that her friends are trying to save her life. They shuffle her into the library and then Stiles, Allison, and Jackson hurry her out of the school to have a study group at Scott's house. Lydia wants to know why they didn't just have the study group in the library, but no one has a good answer. At Scott's house Jackson and Lydia go up to Scott's room and Jackson starts getting a headache. He asks Lydia for his key back. She yells at him for his insensitivity, but he just asks for the key again. She says she doesn't have it, but he can see her sweat and hear her heart.
Jackson accuses Lydia of editing the tape he made of himself on the night of the full moon. He says he doesn't know why she would do that. Maybe she wanted to take his moment like she takes everything. She tells him that if he wants the key so badly he can have it and then removes the chain she keeps it on from around her neck. She cries and he can't quite stand it, so he kisses her.
Lydia and Jackson hear crashing downstairs. Lydia goes to investigate, but Jackson falls to his knees and grabs the back of his neck in pain. Allison appears and tells Lydia to get back in Scott's room because someone is trying to break in. Lydia does and notices that Jackson is missing and the window is open. She calls the cops. After the fighting downstairs stops, Lydia comes rushing out to find Derek and his betas on the front lawn. She demands to know what's going on.
Allison takes Lydia home and begs her not to talk about what happened. She asks Lydia to keep her and Scott's relationship a secret. Lydia doesn't think there's anything to keep a secret about. Allison begs her to remember what it feels like to see her boyfriend standing down the end of the hall at school and you can't breathe. Lydia says she's never had that feeling. Then she gets out of the car.
Later that night, Lydia takes her dog outside. It's a papillon named Prada. When the dog doesn't come back when called, Lydia walks through the pool area to look for her. Young Peter Hale appears carrying the dog. Lydia asks him if there's a non-rapist explanation for him being in her yard in the middle of the night. He tells her that he heard Prada barking and that he lives in the house out back. She thanks him for bringing Prada back, and he asks her if everything is okay. She wants to know what damage he's implying and asks if he's referencing the other day in class. He shrugs like yes. She claims that she's not crazy. "At least I'm not one of those Vicodin-popping wrist-cutters at school." He asks her if that's what the other girls are like and steps closer. She backs up. He asks her why she moved away. "You stepped forward." "Maybe I wanted to kiss you." "Maybe I don't want you to." "Does that mean maybe I could?" She threatens him, so he asks if he can hold her hand. She scoffs at him, so he picks a flower off the trellis behind her and asks if he can give her a flower. He makes her promise to keep it. She tells him that if she doesn't have it tomorrow, she'll lie.
The next evening, Allison returns home and turns on the light in her room. Lydia is sitting on her bed. "I've been sitting here for an hour waiting for you." Allison tells her that she can't hang out, but Lydia says she doesn't need someone to hang out with, she needs someone to talk to. Allison tells her to wait, but Lydia complains that everyone is always telling her to wait. Allison tells her that she can't expect everything right now. She needs someone to translate 5 pages of archaic Latin right now, but that's not going to happen either. "I know archaic Latin," Lydia says. Allison gives her the pages.
Lydia says that Ms. Morell's translation was wrong. The kanima doesn't seek a friend, it seeks a master.
As the pack narrows in on what it is about Jackson that made him the kanima and not a werewolf, Stiles tries to ask Lydia about Jackson's birth parents. They think there's a connection to his current state and something in his past. If Lydia knows, though, she's not telling. At the end of the school day, Lydia is at her locker talking to Young Peter again. He asks her if she's busy after school. She says she always is, and he tells her to unbusy herself because he wants to show her something. He tells her to bring the flower he gave her.
When Lydia gets home she searches her bag for the flower Young Peter gave her. She can't find it and goes outside to the spot by the pool where he picked one the first time, but she can't find another one like it. She looks out the back gate and is drawn toward it. She walks barefoot through the woods and comes upon a giant house and goes inside.
Lydia walks around the empty house calling for people. Young Peter walks up behind her. She asks if this is his house and he says that it was. However, the exterior of the house previously shown does not match the Hale House. He asks her if she brought the flower. She says she couldn't find it. He tells her that it's okay, but since she doesn't have it he wants to collect his kiss. They start making out.
When Lydia pulls away, she sees their reflection in a mirrored wardrobe in the middle of the room. She's holding Peter Hale's burned body, and suddenly the background changes to the interior of the Hale House. She backs away from him in fear, and he asks if something is wrong. Lydia screams, and we see the actual exterior of the Hale House. Burned Peter sits down next to Lydia. He apologizes for how confusing everything must be. He thinks she'll pull through this ordeal with a minimal amount of PTSD and a few years of profoundly disturbing nightmares. He tells her that he had a plan and starts playing with her hair. "It was a good plan. But if there's one thing I've learned in life it's to always have a back-up." Her immunity means that she wouldn't turn and she wouldn't die, but she'd be able to do a very important thing. He nuzzles her hair and then disappears before he tells her what.
Lydia has flashbacks to all the times she saw Young Peter and realizes that he wasn't there. She opens her hands and finds a wolfsbane flower.
While everyone else is involved in trying to catch Jackson at the rave, Lydia is in the shower, and suddenly gets the sense of being watched. She shuts off the water and slowly pulls back the curtain to reveal the lacrosse field and a stand full of fans. She's in the middle of the field in her winter formal dress, and everyone is cheering for her. Then she turns and sees Peter Hale stalking out of the dark. She tries to run, but he grabs her, throws, her to the ground, and crawls on top of her.
She wakes up from her nightmare with a shout. Her sheets are covered with dirt that she's carried in from a night of acting without her knowledge. "Leave me alone," she says. Peter is in bed next to her, and he sighs a little, telling her that he can't, not yet. She asks if he's real, and he tells her that the answer is also "not yet." He says that everything will get back to normal once she does everything that he asks.
Peter leads her down the stairs and explains to her that everything needs to happen on the next full moon. He explains that the full moon of March is called the Worm Moon because it's the last full moon of winter and the worms start to crawl out of the earth. (Note: There has already been a full moon in March, which was the full moon where Jackson first became the kanima. There have been 3 full moons since Season 1: 1x01 - Wolf Moon, 1x08 - Lunatic, 2x02 - Shape Shifted.)
Lydia points out that the full moon is on Wednesday, which is also her birthday. Peter says that her birthday is always the party of the year. He tells her that they're going to make it a very special party. She asks what will happen if she doesn't go along, and he shows her a vision of her party guests murdered. "Why me?" "Because Lydia Martin is not only beautiful, not only incredibly intelligent, she's immune." She asks what it is that she's immune to, and Peter realizes that no one has told her about werewolves yet. He says that it's probably best if he just shows her, and then he appears in his alpha form outside her living room window. Lydia screams, and Peter breaks through the window to leap at her.
On Wednesday, Lydia arrives at Allison's with Macy's bags full of clothes for her to try on for the party. Lydia is planning to wear at least three outfits for the evening. Allison notes that Lydia didn't send out any invites and Lydia explains that her party is the biggest event of the year, so there's no need for invites. Allison's concerned because things have been off lately. She brings up Jackson and Lydia stares at her. Allison asks if Jackson's coming to the party and Lydia replies that everyone is coming to the party. Lydia finds Jackson at the school coming out of the boys locker room. She asks him if he's coming to the party and at first he's zoned out. When she touches him, he comes to and tells her that she doesn't want him there. She attempts to tell him that she's over the breakup, but Jackson grabs her arm and insists that she doesn't want him there. She doesn't take no for an answer, even though she backs away from him slowly.
At first, no one is at the party and Lydia walks around aimlessly trying not to cry. Allison convinces Scott and Stiles to do something to help her and they call in favors to get attendees. Eventually, the party picks up. Jackson arrives and Lydia turns around, surprised and pleased to see him. She gives him a glass of punch that's been spiked with wolfsbane.
Lydia switches dresses. She keeps handing out more punch. She finds Scott not drinking anything and tells him that he really should go make up with Allison. She convinces him that he should try to have a good time. He agrees and starts drinking some punch.
Lydia leaves the party and heads to Derek's subway tunnel hideout. He's just finished dealing with his betas freaking out at the full moon when she appears and blows purple dust in his face. It knocks him out. Lydia somehow drags Derek from the subway lair into her car and then into the Hale House. He's starting to come to as she drags him across the floor. She has turn up the floorboards over where Peter is buried. Derek begs her to stop. She puts his arm in Peter's hand. "You don't know what you're doing," he breathes. She then adjusts some mirrors she has setup around the room and bounces moonlight directly down onto Peter, resurrecting him.
Everyone returns to school and prepares for the championship lacrosse game. Because so many players are out, Stiles gets put in the game--his first ever. Lydia is in the stands watching and tries to give him support. When Stiles gets the ball and runs toward the goal she cheers. It's her shouting at him to shoot the ball that actually causes him to shoot and score. From then on, he's MVP. At the end of the game, the lights on the field go out. When they come back, Jackson is on the ground. Lydia screams and runs toward him, and Melissa tells her to hold his head while she tries to revive him.
Later that night, Lydia goes to Stiles's house for someone to talk to. She asks about the bruises Gerard gave him, but he brushes the question aside. They stand awkwardly before Stiles invites her in, and she stands in his room with her back to him. He asks how she is, and she replies that they won't let her see Jackson. She starts to cry as she tells him that she's supposed to give Jackson his key back and clutches the key on a chain around her neck in both hands. (NOTE: She already gave him his key back, so he must have dropped it when he turned into the kanima in Scott's room in 2x05 - Venomous.)
Stiles doesn't have any tissues for Lydia to use, so he offers her a roll of toilet paper instead. She looks at him like he's kind of an idiot but takes it anyway and wipes her eyes. Stiles gets a text message from Scott that he doesn't check. Lydia gets up and looks around his room, noticing a collection of jewelry on his dresser. She asks him about it, and he admits that it was stuff he bought her for her birthday. He didn't know what to get, so he bought a collection of things. She's flattered, but not quite sure what to say, until she sees the flat screen TV, which lets her make a sarcastic remark. Stiles says he's definitely returning that. Another text message come through, and Lydia makes him read that one.
Lydia tells Stiles that she wants to help Jackson. Stiles replies that her problem is that she doesn't care about getting hurt. "But you know how I'll feel? I'll be devastated, and if you die I will literally go out of my friggin mind. You see, death doesn't happen to you, Lydia, it happens to everyone around you, okay? To all the people left standing at your funeral, trying to figure out how they're going to live the rest of their lives now without you in it." Stiles realizes that he's transferring his feelings about his mother's death onto her and apologizes, but Lydia is sufficiently upset and freaked out that she leaves to find Jackson on her own.
At some point, Stiles catches up with her, and the two of them head to the warehouse district where Scott, Derek, Peter, Chris, Gerard, and Allison are fighting. Stiles crashes his Jeep into the warehouse and then into the kanima. Lydia is with him. Stiles pants and opens his eyes, asking Scott if he hit him. The kanima leaps onto the hood of the Jeep, and both Stiles and Lydia scream and get out.
Lydia steps in front of the kanima calling Jackson's name. She holds up the key he had been asking for. Stiles tries to stop her, but Scott holds him back. The key triggers a memory of Jackson giving her the key one night after they made love. In the memory, they joke that it's just to make her a more accessible booty call, but it was clearly more than that. Jackson is nearly transformed back into himself when the scene cuts back, and he takes the key from her hand. It's a bittersweet moment, because while the key was a symbol of love, her giving it back is a symbol of their breaking up.
Derek sees Peter making his move while Jackson is distracted. Derek's eyes go red and joins him. They both stab Jackson with their claws from either side. Lydia rushes forward and catches Jackson in her arms as he falls. Jackson asks Lydia, "Do you still?" And she replies, "I do. I do still love you." He falls against her and the key from his hand drops to the floor.
Lydia lays Jackson down and the rest of his kanima transformation disappears. She gets up and starts to walk away, crying. Stiles moves forward to meet her, but then stops. They all notice Jackson's claws curling into the concrete. His eyes open and they are werewolf blue. Jackson, naked, turns his wolfed out face to the sky and roars. Then, shifted back to normal, he looks at Lydia, terrified. She rushes to him and hugs him.