The season begins after the deaths of Elena and Jeremy Gilbert's parents. Both are put in their Aunt Jenna's custody. Jeremy has become a loner and Elena starts dating a boy named Stefan Salvatore. It is soon revealed that Stefan is a vampire and his brother Damon shows up in Mystic Falls and kills people at random.
Another supernatural revelation occurs when Elena's friend Bonnie Bennett discovers she is born into a line of witches and is a witch herself. She gets help from her grandmother to use her powers. Elena's friends and acquaintances also become involved such as Tyler Lockwood, son of the mayor, and Matt Donovan, Elena's ex-boyfriend and Caroline Forbes, daughter of the sheriff. It also turns out that Elena is the doppelganger of Katherine Pierce, a woman who, centuries ago, seduced the Salvatore brothers and turned them into vampires, turning their vampire hunting father against them, though Stefan ends up killing him. Katherine was presumably trapped in a tomb beneath the church and Damon is planning on releasing her. Lexi, a friend of Stefan's shows up and befriends Elena, but is killed by Damon, driving a wedge between brothers.
Jeremy falls in love with Vicki Donovan, Matt's sister, who uses drugs like him, but she was dating Tyler and starts a rivalry between the boys. Vicki breaks up with Tyler for Jeremy. She is later turned into a vampire by Damon, but her bloodlust was out of control and she is killed by Stefan. Jeremy witnesses this and Elena asks Damon to make Jeremy forget this to spare him the pain. Matt on the other hand is devastated.
After the history teacher is killed, a man named Alaric is hired to take his place. Alaric came to town to kill Damon, believing him to have killed his wife, Isobel. Damon tries to kill him in self-defense, but Alaric wears a ring that keeps him from dying at supernatural hands. It is revealed Damon didn't kill Isobel, but turned her into a vampire on her own account. Later, Alaric and Damon become friends.
At one point, Damon finds the tomb under the church, and has Bonnie and her grandmother help open it to find Katherine. During the search, a number of vampires escape, and it is discovered Katherine already escaped long ago. The tomb vampires are led by a female vampire named Pearl and her daughter Anna. Bonnie's grand mother dies and Bonnie begins to resent vampires. It also turns out a group called the Founder's Council know of the vampires and wish to kill them. The Council is led by Tyler's abusive father, Richard Lockwood. Caroline's mother, Sheriff Elizabeth Forbes is also a member, despite being friends with Damon, unknown that he is a vampire. Anna also starts a relationship with Jeremy. Jenna also starts dating a man named Logan, who cheated on her in the past. Soon, Logan is turned into a vampire by Anna, and is killed by Alaric, who tells her he left town. From that point Jenna starts dating Alaric.
It isn't long before Elena and Jeremy's uncle John, who they grew up hating shows up. John is working for the Council. The Council wish to use the Gilbert device to kill all vampires in Mystic Falls. Damon tries to kill John, but he is wearing a ring similar to Alaric's. It is revealed that John and Isobel, Alaric's vampire wife, are Elena's biological parents, they had Elena adopted by John's brother for her protection. It turns out they are also working for Katherine, and are using Mayor Lockwood and the others as pawns, although Isobel tells Elena their unofficial goal is to protect her.
In the seasons climax, during Founders day, Richard and John execute their plan to kill the vampires, both willing to use innocent people as collateral damage. Sheriff Forbes tries to oppose their plan, but is knocked out by John and chained up. John uses the local police who are in on the scheme as foot soldiers. The device is activated and the vampires are neutralized and taken away to be burnt in a basement, but Tyler is affected by the device as he had supernatural genes himself (later revealed to be werewolf); since Richard has these genes, the deputies think he is a vampire and lock him in the basement where he is burnt alive and killed by the vampires. Richard's wife, Carol goes to the station to rescue the sheriff but they are unable to save Richard. John also kills Anna, so Jeremy, not wanting to deal with the pain tries to become a vampire via Anna's blood. During the fiasco, Caroline is in a car accident, Elena also confronts John with the knowledge that he's her father and Bonnie rescues the Salvatore brothers, letting them off with a warning so Damon doesn't kill anyone innocent.
Sheriff Forbes finds her daughter has been injured and goes to the hospital where she is comforted by Damon. John heads home and finds Katherine, who is posing as Elena. Katherine stabs John several times and severs his ring finger and leaves him to die. As Katherine leaves, Elena comes in and finds her father injured