As Angela prepares to travel to Greece, she leaves her grandson Lance in charge, though under the strict supervision of her reliable foreman, Frank Agretti. Since Daniel, an unsuccessful author, has turned to gambling, drinking and brutality, Emma has become a battered wife. To escape her troubles, Emma turns to another man, Charley, for much-needed affection. In an effort to get out of prison, Richard decides to testify against his co-conspirator, Michael Sharpe. Richard evades an attempt on his life meant to stop his testimony. Accidentally getting her finger stuck in a pool drain, Maggie drowns. Angela hires a private investigator to tail Pilar.

Emma's old friend Charley arrives just in time for Maggie's funeral. Although Angela disapproves of Charley and changes her vacation plans, Emma stands by Charley despite Angela's interference. Michael Sharpe takes his revenge on Richard for his testimony against him by having Richard's children removed from his custody. Aware that Angela is trying to break up his relationship with Emma, Charley places a pillow over Angela's face and suffocates her.

After being found unconscious, Angela is rushed to the hospital, where she slips into a coma. Lance has a difficult time managing Falcon Crest without Angela, particularly when business associates insist on negotiating with Angela, but fortunately, Pilar is able to help Lance deal with their distributor, Ned Vogel. Richard discovers that Michael was instrumental in Richard's loss of custody over his children. A power outage at the hospital forces the family to consider pulling the plug on Angela's life support.

With his continued influence over Emma, Charley upsets the family. After the bank calls in its loan, Richard saves Falcon Crest from Michael Sharpe. Encouraged by his sister-in-law, Genele Erickson, Frank Agretti goes to the bank with the power of attorney which Angela had given him prior to her aborted trip to Europe and takes over operation of Falcon Crest.

Due to Richard's testimony, the S.E.C. slaps Michael Sharpe with the largest fine in history. Lauren and her husband confront Michael about his schemes and their custody of Richard's children. Frank's obsession with the treacherous Genele escalates. Charley is relieved to hear that Emma's husband has apparently committed suicide, since his death removes the last obstacle for Charley to marry Emma. When the court gives control of Falcon Crest to Emma, she is overwhelmed by the notion of running the business. Emma's new husband Charley, however, has many ideas about running Falcon Crest.

Charley hires his brother Ian and his young, child-like wife, Sidney, to help run the winery. Since the new arrivals put Charley at odds with Lance, the two fight. After Lance soundly beats Charley, Charley immediately fires him. After rescuing his sons, Richard learns that they liked Lauren and returns them to Lauren's care, despite the fact that she is Sharpe's sister. After Pilar and Lance confront Emma about Charley, he throws a bacchanal party, which is crashed by bikers. Ned Vogel, who has taped evidence of Pilar securing his distribution contract through sexual favors, blackmails her. At Angela's bedside, Emma thinks she hears her comatose mother command her to get rid of Charley, but Emma isn't sure whether or not she imagined it.

As Michael Sharpe arranges for Richard to be killed, the contract eventually goes to Sal, Richard's acquaintance from prison. Instead of killing Richard, Sal offers to help him get back at Sharpe, but later pays with his life when Sharpe learns that Sal double-crossed him. After Sydney defies her husband and befriends Emma, Ian beats her. In order to get rid of Lance, Charley shows him a videotape of Pilar's liaison with Ned Vogel. Despite Pilar's pleas, Lance leaves enraged, just as Charley had hoped.

Michael Sharpe convinces Ian and Charley to sell Falcon Crest to him, but Emma backs out. When Sharpe informs Ian and Charley that he has information on them that could put them in jail, Charley agrees to kill Emma and forge her signature. Charley is stopped in his tracks, however, when an unsuspecting Emma informs him that she is pregnant. Lance becomes embroiled in a deadly game of Russian roulette involving scorpions.

Charley keeps the pressure on Emma to sell to Sharpe, despite the fact that she is pregnant. After Charley tells Ian about Sydney's affair with Chris Agretti at the winery, the two brothers agree to kill their wives for deceiving them. Richard lets Lauren know how much she means to him. After Frank sees Sydney and Ian in a struggle, he tries to help, but when Ian gets the upper hand, Sydney saves Frank by killing Ian with a letter opener. Charley chases after Emma, but Emma shoots him in the chest.

With a bullet wound in the chest, Charley disappears from Falcon Crest. Because Chris Agretti is missing, Sydney worries that Ian and Charley might have killed him. Sharpe gains control of Falcon Crest by threatening to press criminal charges against Emma for authorizing the release of tainted wine. Sharpe's son Danny provides his father with crucial evidence, which he found while on a date with Sydney. Richard suspects that Lauren's marital situation is worsening, while Lance resists renewing a sexual relationship with Pilar.

As payback for Jace Sampson's cooperation in Sharpe's takeover of Falcon Crest, Richard talks Jace into making an investment after which Jace loses all his money. Pilar and Lance's estrangement worsens. After Walker catches Richard and Lauren kissing, he confronts them with dynamite strapped to his chest, which is set to go off when the timer runs out. Rather than kill Lauren and the boys along with Richard, Walker runs outside just as the dynamite explodes.

When Genele forces Frank out of his own home in order to entertain her lover Sharpe, Frank delivers the remains of Genele's sister and Frank's ex-wife Renee to the police, informing them that Genele killed her ten years before. Sydney tries to push Pilar and Lance back together. Sharpe is displeased when Lauren moves in with Richard after her ordeal with Walker. Sharpe tries to act as a business mentor for Danny.

Haunted by the memory of her husband's death, Lauren moves out of Richard's place and in with Genele. When Danny invites Sydney for a romantic night on his father's yacht, Sydney maneuvers to put Lance and Pilar on the boat together instead. When Sharpe uses sensitive information about Richard's business dealings, he makes $300 million and Richard loses $52 million. Richard wrongfully accuses Lauren of leaking the information. After showing up at Richard's door, Genele removes her clothes.

Danny fights Sharpe's attempts to control his life and to make him break up with Sydney. After Sydney brings them back together, Lance and Pilar make plans to retake control of Falcon Crest. When Richard learns through Pilar that Genele was responsible for delivering his business secrets to Sharpe, he throws Genele out and attempts to reconcile with Lauren. Realizing that her brother's affection for her is more than just brotherly, Lauren decides she has to leave Sharpe's house.

Richard and Sharpe search for Lauren, who had grown tired of their fighting and ran off to work as a waitress in a diner. Sharpe attempts to convince Danny to drop Sydney, who wants Falcon Crest to return to the Channing's. When Lance and Pilar ask Sharpe what it would take for him to sell them Falcon Crest, Sharpe tells them to break up Sydney and Danny. When Lauren returns to Richard and the boys, she has to deal with Richard's continuing obsession with his dead wife Maggie.

After Genele intercepts stolen bonds that Sharpe is trafficking, she arranges for Richard to cash them. Lance, Pilar and Danny believe that things are finally turning around for the winery. Genele has to pay hush money to a witness, but Richard has decided to keep all the money as revenge for Genele's past deceit. When Richard has the bonds cashed under the name Sharpe, Sharpe assumes his son Danny did it under Sydney's influence. After Sharpe tampers with Sydney's car, Danny happens to borrow her car and ends up in an accident.

Danny has a severe head injury as a result of crashing Sydney's car, which Sharpe had tampered with to get at Sydney. Danny's mother, Anne Bowen, and Sharpe decide to approve a dangerous operation to remove a bone shard from Danny's spinal cord. Discouraged by the bad luck she seems to bring to all her boyfriends, Sydney leaves Falcon Crest. Suspecting that Sharpe was behind the car accident, Richard and Lance track down the auto mechanic, Sacco, who did the tampering. Alerted to Richard and Lance's involvement, Sharpe sends his chauffeur Nick to ensure that Sacco doesn't talk.

Lauren tries to persuade Anne to reconcile with Sharpe. Anne and Lauren work to create an understanding between Sharpe and Richard, but once the women leave, Sharpe and Richard each vow to find the mechanic Sharpe hired to tamper with Sydney's car. Pilar disguises herself as a homeless woman to win the trust of Sacco's girlfriend, who leads Pilar to Sacco. Sharpe's henchman, Nick, follows both of them. However, when Nick is about to shoot Sacco, Lance disarms him from behind. With the informant they need to wrest Falcon Crest from Sharpe, Pilar and Lance call Richard.

Richard knows that Sharpe was behind the sabotage that almost killed his son, Danny, and he has Johnny Sacco, the mechanic paid to tamper with Sydney's car, to prove it. In order to keep Danny and his estranged wife Anne from knowing his involvement in the accident, Sharpe transfers ownership of Falcon Crest to Richard. After Anne agrees to give her marriage with Sharpe a second chance, she changes her mind when Johnny Sacco arrives intoxicated at the Sharpe residence and tells Anne everything. Anne lets Sharpe in on a secret she's kept for 21 years: Richard is Danny's real father. After several months in a coma, Angela revives.

Sharpe reels from the news that his hated rival Richard is Danny's father. Richard's plans to run the winery with Lauren run into a snag when Angela returns after regaining consciousness. When Richard informs Angela that she has no legal claim to the winery, Angela pretends to give in, but she is secretly planning to block Richard's marriage to Lauren with the help of Michael Sharpe.

After Danny learns that Richard is his father, he goes to Sharpe to tell him it doesn't matter, but Sharpe throws him out of his office and tells him that they should go their separate ways. Because Danny has no job and nowhere to live, Lauren invites him to live with her and Richard, but Richard wants nothing to do with Danny. After witnessing this callous side of Richard, Lauren considers calling off their wedding. When Danny threatens suicide, however, Richard and Sharpe agree to help him, which reassures Lauren. With the wedding back on schedule, Angela must find another way to stop it.

As Richard and Lauren enjoy their wedding at the winery, Richard agrees to sell Falcon Crest back to Angela on the condition that half will go to his sons in the event of her death. Lance, however, will receive ten percent now and the remainder after Angela's death. As the wedding reception draws to a close, Angela recalls all the people who passed through Tuscany Valley during the last decade and toasts the future of Falcon Crest.