In 1945, Agents Peggy Carter, Dum Dum Dugan, and Jim Morita of the Strategic Scientific Reserve (SSR), the precursor to S.H.I.E.L.D., attack the last known HYDRA base following the defeat of the Red Skull, and arrest the Hydra agents, including their leader, Reinhardt. They confiscate all Hydra weaponry and technology they find, including a blue body and the mysterious Obelisk. In the present day, former S.H.I.E.L.D. agent Roger Browning is attempting to sell information about the Obelisk to Agent Isabelle Hartley and her mercenary colleagues Lance Hunter and Idaho, all working undercover for S.H.I.E.L.D., when Browning is murdered by Carl Creel, a man with the ability to "absorb" the properties of any substance he touches, consciously changing his molecules to those of whichever substance he wants.
At the Playground, the former SSR base that now serves as S.H.I.E.L.D.'s headquarters, Director Phil Coulson recognizes the importance of the Obelisk, noting that it is the first 0-8-4, meaning an object of unknown origins. He sends Agent Skye to talk with Hydra double-agent Grant Ward, a prisoner of S.H.I.E.L.D. with suicidal tendencies, who insists only on speaking with Skye, whom he has romantic feelings for. Ward reveals the secret frequencies Hydra uses to communicate, and Agent Billy Koenig intercepts Creel's next directive, which is to use the family of Brigadier General Glenn Talbot as leverage to find the Obelisk. Agent Melinda May, Skye, Hunter, and Hartley help Talbot fight off Creel before abducting Talbot and deceiving him into giving them access codes for a U.S. military base near Washington, D.C. that contains numerous confiscated S.H.I.E.L.D. assets.
All available S.H.I.E.L.D. field operatives infiltrate the base, with Agent Antoine Triplett posing as a U.S. general. Hartley finds the Obelisk, but is attacked by Creel, though he flees when he realizes that the Obelisk is somehow killing her. Hunter and Idaho flee with Hartley, desperate to save her life, while Triplett, May, and Skye carry out Coulson's orders to steal a S.H.I.E.L.D. quinjet. Hartley realizes that she will die before they reach a hospital, but is unable to release the Obelisk, and so she makes Hunter amputate her arm. Mechanic Mack questions why Coulson would risk lives just to steal a quinjet, but Coulson explains that they need its ability to literally disappear, something they currently cannot do themselves following the injuries engineer Agent Leo Fitz suffered at the end of the first season; he now struggles with technology and technological terms, and hallucinates the presence of Agent Jemma Simmons, who left S.H.I.E.L.D. some time earlier because of Fitz's condition. Idaho is unable to prevent the car that he, Hartley, and Hunter are in, from hitting Creel, who turns himself into tarmac, causing the truck to flip. Hartley and Idaho are killed, and Creel retrieves the Obelisk for his employer, Sunil Bakshi.
In an end tag, Bakshi is shown to be working for Reinhardt, now going by the name Daniel Whitehall, who appears to have not aged since 1945.