Even though Matt has no love lost for the gangs of New York, he becomes concerned when he learns of an "army" killing mobsters. The lone survivor of an attack on the Irish mob, Grotto, goes to Nelson and Murdock for help. Matt discovers it's just one man who has been taking down these criminal organizations — "the Punisher." When Daredevil first encounters him, the Punisher shoots him in the head. (This leads Matt to get a new-and-improved suit from Melvin Potter.)

Later, the Punisher holds Daredevil hostage and puts him in a moral dilemma that highlights their differing vigilante philosophies. If Daredevil doesn't kill the Punisher or Grotto, Castle will kill Grotto anyway. Matt tries to save the Irish mobster, but the Punisher ends up murdering him despite Matt's efforts.

Karen begins investigating the Punisher and, thanks to Assistant District Attorney Blake Tower, learns that he is Frank Castle. She realizes that District Attorney Samantha Reyes is covering up the truth about Castle. The former Marine was at a carousel in Central Park with his wife and two children when gang members engaged in a shootout that killed his entire family and left him with a bullet in his head.

This gang meetup was actually a sting orchestrated by Reyes to bring down the drug dealer known as the Blacksmith. She didn't clear the area of civilians and when it went south, she covered up the truth about Castle's family. The "Massacre at Central Park" explains why the Punisher targets members of the mafia and why Foggy and Karen want to bring down the corrupt Reyes.

Although romance is in the air for Matt and Karen at the beginning of the season, that comes to a screeching halt once Elektra reenters Matt's life. Matt's college girlfriend asks him for help into looking into the Yakuza — the Japanese crime syndicate that gave Daredevil grief in Season 1. She believes they are up to something big (and she's 100 percent right), so Matt agrees to help.

While they still love each other, Elektra's presence isn't always good for Matt since she's more ruthless than he is and she manipulates him just like she did in the past. But Matt is also at fault for making Elektra and her dangerous plans a priority and lying to his friends.

After some vengeful Irish mobsters torture Castle, Daredevil helps him escape but then turns him over to Sergeant Brett Mahoney. During his trial, Nelson and Murdock represent Castle since Reyes intends to throw the book at the Punisher since she is still covering her tracks. Elektra hurts their case when she tortures the chief medical examiner before he was going to give testimony that he had tampered with Castle's family's death certificates on Reyes' orders.

Foggy takes the lead on Castle's case after a fight with Matt about Elektra. Foggy seems to be swaying the jury in Castle's favor, thanks to a testimony from his Marine commander Colonel Ray Schoonover. However, when Matt claims that Castle doesn't know right from wrong, Castle admits his guilt and shows no remorse while on the stand. He's sent to prison.

As they follow the Yakuza, Matt and Elektra find an abandoned building site with a giant hole in the ground. (This is Midland Circle for The Defenders fans.) They are attacked and Matt's old mentor Stick saves them. Stick reveals that Elektra has always worked for him and they're part of the organization the Chaste. He explains that the Yakuza is a front for the ancient, evil group the Hand that the Chaste is at war with. The Hand has found the secret to immortality and Matt only agrees to help fight them if Elektra breaks ties with Stick.

The main villain of Season 1, Wilson Fisk, is stuck in prison for Season 2. But the Kingpin still has his connections. He gives Castle the opportunity to take down another prisoner believed to be involved in his family's murder. Fisk betrays Castle, which results in a bloody prison brawl where Castle is the victor. Kingpin then realizes Castle's value and helps him escape prison.

With Castle out of prison, Reyes believes he may be targeting her daughter. She calls Matt, Foggy, and Karen to her office where she admits her guilt in covering up the truth about Castle's family due to her botched sting operation. But a shooter outside kills Reyes while Blake, Matt, Foggy, and Karen survive. It sure seems like Castle is behind the murder, but Karen aims to prove it wasn't him through her budding journalism career with Mitchell Ellison at the New York Bulletin. When Karen goes to her apartment, Castle saves her from the same fate as Reyes, proving his innocence to her.

While Stick tells Matt that the Hand has the key to immortality, he doesn't believe it until he discovers that Nobu Yoshioka is still alive. Daredevil also discovers children being used for an experiment where their blood is drained into an ancient tomb. He sends these kids to Claire Temple at the hospital so that she can care for them. Except, the Hand attacks the hospital and the children appear to be possessed since they willingly leave with the Hand ninjas. When the hospital covers up the incident, Claire quits.

Castle learned in prison how the Blacksmith was the one responsible for organizing the drug deal in Central Park that led to his family's death. Karen finds out that the Blacksmith has been Ray Schoonover all along. With Castle hellbent on exposing the Blacksmith's identity, Schoonover was the one who shot at Reyes and Karen. When Karen interviews Schoonover, he tries to kill her, but Castle saves her. Despite Karen's protests, Castle kills the Blacksmith — putting an to avenging his family but solidifying his status as the Punisher. Castle is also presumed dead by authorities, leaving him to star in his own series.

Elektra had killed a young Hand assassin, which angered Matt and he ordered her away. She planned to leave New York City, but Stick sent another assassin to kill her at the airport. She comes back to kill Stick, but Matt stops them right before Stick is kidnapped by the Hand. Even though they were just at odds, Matt convinces Elektra to go save Stick. The Hand tells Elektra that she is their weapon, the Black Sky, but she chooses to save Stick instead of joining forces with them.

Yet, the Hand kidnaps people important to Matt, including Karen, so Daredevil and Elektra must battle them again. In the fight, Elektra sacrifices herself to save Matt and he defeats the Hand with the help of the Punisher. Matt visits Elektra's grave, but at the very end of the season, she is resurrected by the Hand, which plays out in The Defenders.

With Nelson and Murdock over, Foggy's ex-girlfriend Marci sets him up with a position at Jerri Hogarth's firm. Meanwhile, Karen becomes a reporter with the New York Bulletin. A devastated Matt is left without a purpose, but he confesses to Karen that he's Daredevil before the season ends.

Matt and the gang closed the Hand chapter of the story in The Defenders. And even though Karen and Foggy think he's dead, Daredevil will return to his friend to battle the bad guys of Hell's Kitchen in Season 3.