At the start of Season 2, the psychological fallout from killing Brian (his brother) and the constant surveillance by Sgt. Doakes have resulted in Dexter having not killed anyone in more than a month. Furthermore, Dexter learns two upsetting things about Harry: that he was sleeping with Laura Moser, Dexter's biological mother, before she died and that, after walking in on Dexter in the middle of a kill, Harry committed suicide from the guilt. These discoveries cause his faith in The Code to waver, and Dexter imagines scenarios in which he turns himself in.

Meanwhile, Debra's experiences with the Ice Truck Killer continue to traumatize her. For safety and comfort, she stays with Dexter, further complicating his life. Additionally, scuba divers discover Dexter's victims in the bay. As the police extract bags of dismembered human remains from the water, the media dubs the suspected killer the "Bay Harbor Butcher," and FBI Special Agent Lundy—an expert on serial killers— is brought in to catch him. Debra becomes romantically involved with Special Agent Lundy. A cult following begins to form behind the "Butcher" when it is discovered that his victims were largely criminals.

Paul Bennett, still in prison, continues asserting his innocence to Rita, only to eventually be killed in a prison fight. Against Dexter's wishes, Rita gives Bennett a full funeral. After reflecting on Paul's claims, Rita confronts Dexter and he admits to framing Paul. This admission, coupled with Dexter's other odd behavior, leads Rita to believe that Dexter himself is a heroin addict, a lie he goes with to cover for his actual activities. She compels him to join Narcotics Anonymous, where he meets and becomes involved with his sponsor, Lila Tournay, a pyromaniac who starts to pursue Dexter obsessively.

Doakes confronts Dexter leaving an NA meeting. Doakes is temporarily satisfied that Dexter's odd behavior can be explained by the traumatic experience of a law enforcement career combined with drug abuse. Doakes' suspicions about Dexter eventually return, and he ultimately discovers Dexter's glass slides. The possibility of matching them with the bodies of the Butcher's victims sets up a climactic showdown in which Doakes confronts Dexter at a remote cabin, ending with Dexter overpowering Doakes and keeping him locked in a cage inside the cabin. Dexter then begins framing Doakes as the Butcher. After the police discover Dexter's slides in Doakes's car, the FBI begins a manhunt for Doakes. Lieutenant LaGuerta, Doakes's former partner, is the only one who believes that Doakes is innocent. LaGuerta tries to prove to Lundy that Doakes was with her on a stakeout during one of the Bay Harbor murders; however, Lundy rejects LaGuerta's case files because she did not report that she received a phone call from Doakes after the FBI began its manhunt.

In the season finale, Tournay finds the cabin where Doakes is imprisoned and causes a propane tank explosion, killing Doakes and blowing up the corpse of one of Dexter's victims, thus preventing Dexter from being caught. Tournay then meets with Dexter, expecting him to accept her love now that she knows his "dark secret". She catches him preparing to kill her and seeks revenge by kidnapping Rita's children and using them to lure Dexter into a trap intended to kill them. Dexter saves the children and escapes, later exacting his own revenge on her after she has fled to Paris. In the closing scenes, Doakes' memorial service goes largely unattended, with the exception of LaGuerta, Dexter, and Doakes' immediate family.