The King in Yellow
written by Robert W. Chambers

In 1995, Cohle and Hart continue to investigate the murder of Dora Lange, and learn she was attending church prior to her disappearance. Cohle deduces that Hart is cheating on his wife, Maggie (Michelle Monaghan), with court reporter Lisa Tragnetti (Alexandra Daddario), creating friction between the two. Cohle is also experiencing hallucinatory synesthetic side effects to his drug consumption and is contemptuous of Reverend Billy Lee Tuttle's (Jay O. Sanders) lobbying for a special task force focusing on "anti-Christian crimes" to assist in the investigation. While buying drugs from a young prostitute, Cohle is pointed towards a remote "ranch" harboring runaway girls as prostitutes. They find Lange's diary and learn the location of the church, which was destroyed in a fire, and that she came under the influence of a man she called the "Yellow King" in a place called "Carcosa." While searching through the wreckage of the church, they find a nightmarish image of a woman with deer antlers painted on a wall. In 2012, Papania and Gilbough continue their interviews of Cohle and Hart. Hart is divorced, and Cohle confides that his daughter died after being involved in a car accident, leading to the collapse of his marriage and the beginning of his addiction. To avoid prosecution for killing a meth user who had injected his own infant child with the drug, Cohle's superiors compelled him to be a "floating" drug undercover officer for four years, until he was hospitalized in a psychiatric institution after shooting three cartel members and being wounded in the gunfight. After his release, Cohle's request for another job resulted in his becoming a homicide detective with CID, where he was partnered with Hart.

In 1995, Ginger and Cohle (still undercover) meet with DeWall Ledoux, Reggie's cousin and cook partner, in a roadside bar. DeWall refuses to do a drug deal with Cohle, but after DeWall leaves, Hart follows him. Hart radios his location to Cohle and the pair meet up near the hidden meth lab in the bayou, where Cohle leads the way through brush, avoiding hidden explosive booby traps rigged to kill unwary intruders. The pair descend on the house where Hart apprehends Reggie and handcuffs him. Cohle draws down on DeWall, who has just stepped out of the meth lab, as Hart is searching the premises, coming across two kidnapped and abused children, one of them dead. Enraged, Hart executes Reggie Ledoux with a shot to the head. DeWall panics and flees but is killed when he detonates one of the booby traps. Hart removes the handcuffs from the dead Ledoux, and Cohle sprays the yard with bullets from an AK to give the appearance that a shootout had taken place. In their 2012 interviews (voiced over the actual events) and later before a shooting board, the pair separately relate identical concocted stories of surviving a chaotic firefight in which Hart managed to kill Ledoux. Hart and Cohle are hailed back at the station and in the press as heroes, with both receiving commendations and promotions. By 2002, Hart is reconciled with his wife and kids, while Cohle has a physician girlfriend. Hart's daughter Audrey has begun acting out and tensions rise once again in the household. Cohle, a renowned interrogator, is brought in to get a confession out of a robber accused of murdering two people in a store while high on PCP. After confessing, the prisoner begs for a deal from Cohle, declaring that Ledoux wasn't the killer of the missing girls--the real killer was never caught and is still killing. He claims he himself met the "Yellow King," information withheld from the public in the Dora Lange case, and that people high up know about the killer. Cohle beats the man, demanding "a name," but is restrained by other detectives. He returns later with Hart to find that the prisoner has killed himself in his cell after receiving a phone call (purporting to be from his lawyer) made from a public pay phone out in the middle of nowhere. Cohle returns to the abandoned religious school, where he finds dozens of stick sculptures, and drawings and black stars on the walls. In 2012, Papania and Gilbough tell Hart that they suspect that Cohle, who they allege conveniently led Hart to every clue or lead in the case, has been behind the killings all along; Cohle has been spotted among the bystanders at the scene of the recent killing in Lake Charles that is similar to the Dora Lange case. Cohle has also been a person of interest in the suspicious death of Reverend Tuttle two years before. Cohle walks out of his interview after the detectives accuse him, ridiculing them to get a warrant, while Hart is asked in his interview to explain what exactly happened between him and Cohle in 2002.

In 1995, Hart and Cohle interrogate Charlie Lange again for information about Ledoux, his former cellmate. Lange informs them that he showed pictures of Dora to Ledoux and identifies a known associate, Tyrone Weem, as a lead. Lange also tells the detectives that Ledoux told him about a group of rich men who would get together for "devil worship" involving sacrifices of women and children. Hart tracks down Weem at a warehouse rave and forces him to name the East Texas biker gang Ledoux is now cooking meth for, the Iron Crusaders. Cohle, who previously worked with the gang while undercover, takes "sick leave" to infiltrate the gang, giving the excuse that he needs to visit his dying father. Meanwhile, Lisa spitefully tells Maggie everything about her affair with Hart, who returns home to find his family gone and his bags packed. He tries to talk to Maggie at her workplace and is confronted by security officers before Cohle arrives to take him away. Cohle hits the Iron Crusaders hangout masquerading as former security for a Mexican cartel breaking away on his own, using high-grade cocaine taken from the police evidence room to back up his claim. He negotiates with his contact Ginger (Joseph Sikora) that if given a commitment to back a deal with the gang's meth producer, Cohle will help Ginger rob a stash house in the projects. Disguised as police, they rob the stash house, shooting one of the residents, and stir up the neighborhood's inhabitants in the process, resulting in an outbreak of gunfire and chaos. With the actual police on their way, Cohle holds Ginger at gunpoint as they escape the house and make their way through the projects. Cohle contacts Hart who collects them from the scene as the police arrive. In 2012, doubts in the investigation start to come forth as Papania and Gilbough question Cohle's sick leave, claiming that there are no hospital records of his father. Cohle tells the detectives about his father while Hart feigns ignorance.