Season four sees Buffy and Willow enroll at UC Sunnydale while Xander joins the workforce. The vampire Spike, having left Drusilla, returns to Sunnydale and is abducted by The Initiative, a top-secret military installation based beneath the UC Sunnydale campus, lead by Maggie Walsh. They implant a microchip in his head which prevents him from harming humans. He reluctantly helps the Scooby Gang throughout the season and eventually begins to fight on their side after learning that he can harm other demons. But Buffy and her friends don't trust him except Willow who opts to give him a chance to redeem himself, which they eventually do.
Oz leaves town after realizing that he is too dangerous as a werewolf and after a horrific encounter with The Initiative. Willow falls in love with Tara Maclay, another witch. They begin a relationship.
Another focus of the season is Xander's relationship with a former vengeance demon named Anya Jenkins, who becomes infatuated with him due to him making her feel human and Xander returns these feelings as she makes him feel like a man. However, Anya tries to get Xander off her mind but their feelings are developed and they begin a relationship
Buffy begins dating Riley Finn, a grad student who she later discovers is a member of The Initiative. He tries to get her recruited but she becomes an object of negative attention from Maggie Walsh. Walsh believes Buffy to be a bad influence to Riley, threatening his ties with The Initiative. After Buffy and Riley's first sexual encounter, Walsh tries to get Buffy killed, which causes Riley to cut ties with Walsh and The Initiative.
It is realized that The Initiative has more sinister plans as its cyborg demonoid hybrid secret project, Adam, escapes and begins to wreak havoc on the town after killing Walsh. After getting Spike to temporarily work for him, Adam plots to create a cyborg demonoid race to overthrow humanity, though Adam sees Riley as a "brother".
Buffy and her allies, upon learning of Adam plans, unite to defeat Adam and destroy The Initiative. The demons and other supernatural creatures fight back against their former captors, while the Scoobies temporarily transfer all their powers into Buffy to fight the physically superior Adam. She kills Adam by ripping his uranium core. Soon The Initiative is defeated and the Scoobies recover.