Season 7 begins with Don Draper (Jon Hamm) still on “mandatory leave of absence” from Sterling Cooper & Partners after he divulged his shocking childhood at a pitch meeting with Hershey at the end of season 6.
But Don doesn't reveal his work situation to his actress-wife Megan (Jessica Paré), who he still visits in Los Angeles on the weekends.
Back at the advertising agency's office in New York, Peggy Olsen (Elisabeth Moss) is at odds with Lou Avery (Allan Havey), Don’s fill-in.
Peggy still has romantic feelings for colleague Ted Chaough (Kevin Rahm), who she had a brief affair with. Things come to a head on Valentine’s Day when she mistakenly thinks the roses on her secretary’s desk are to her from Ted.
In an attempt to get back his old job, Don tells Roger Sterling (John Slattery) he’s received an offer from a rival firm.
This leverage allows Don to return to SC&P, but his fellow partners give him strict conditions.
Don is now to report to his former underling, Peggy, who is put in charge of getting the firm's next big account with Burger Chef.
Pete Campbell (Vincent Kartheiser) persuades Peggy to let Don lead the Burger Chef pitch, which leads to Peggy and Don mending their friendship while talking strategy.
While in LA, Harry Crane (Rich Sommer) tells Don that his job may be in jeopardy because SC&P is going after cigarette company, Philip Morris. Don is known in the ad world for famously turning on big tobacco in a previous season.
During a pitch dinner, Don interrupters Lou and Jim Cutler’s (Harry Hamlin) meeting with Philip Morris and suggests the company “force” him to apologize for his past remarks so that the agency can land the account.
But it doesn't work. Don receives a letter that he’s being fired due to his stunt at the Philip Morris meeting. However, he gets the partners to stall on the matter until after the Burger Chef pitch.
Meanwhile, SC&P launches into the modern age with their first computer to bolster their media division.
The humming of the computer leads Michael Ginsberg (Ben Feldman) to go crazy. He cuts his nipple off and delivers it to Peggy in a box, professing his love for her.
Peggy calls a doctor and Ginsberg leaves in a stretcher.
Also facing hard personal times, Roger learns that his daughter, Margaret (Elizabeth Rice), has joined a hippie commune. He tries to get her to leave, with no success.
Don and Megan also reach a breaking point. The bi-costal relationship becomes too much for the couple and they agree to separate.
In the final episode of the first part of season 7, Don, Peggy, Pete, and Harry are in Indianapolis preparing to pitch to Burger Chef when Neil Armstrong lands on the moon.
That same evening, SC&P founder Bert Cooper (Robert Morse) dies.
Following Bert's death, Roger makes a deal to sell 51% of SC&P, making it an independent subsidiary of one of their competitors and saving Don’s job.
The first half of the season concludes with Don having a vision of Bert dancing in the halls of SC&P singing “The Best Things in Life Are Free.”
