Captain Stottlemeyer calls Monk to his office for some important news. Monk assumes the worst, but the news is actually positive. Monk has been reinstated to the police force!
Monk is nervous and excited for his first day back. As Natalie sends Monk off to work, she reveals that she has an interview for a glamorous job with a concert promoter. As Monk and Natalie say goodbye, Monk laments that this could be the end of their partnership.
At police headquarters, Monk receives a warm welcome from his fellow officers. Stottlemeyer has even arranged for Monk to sit at the same desk he used years before. But Monk is disappointed to learn that he's been relegated to desk duty in the case of the Pick Axe Killer - the department's hottest case.
Later that day, one of Monk's coworkers, Officer DiMarco, bursts in to inform him that the Pick Axe Killer has been arrested. A window washer named Manny Alvarez saw someone matching the killer's description and tipped off the police. It's great news, but Monk is a little disappointed that the case was solved without his help.
A week later, Natalie is enjoying her exciting new job in the music business, and Monk has left his desk job to begin working with a new partner, Detective Doyle. Monk has suspicions about Manny Alvarez's story, so he takes a break from his work with Doyle to investigate the location where Manny claimed to spot the Pick Axe Killer. Monk quickly establishes that it would have been impossible for Manny to see the killer from that vantage point. Monk shares this information with his superiors, but since the man they arrested off Manny's tip has confessed to being the Pick Axe Killer, nobody wants to entertain any theories that might interfere with the successful closure of the highly publicized case.
Then, Officer DiMarco turns up dead. The police believe that DiMarco saw something going down on his way home, tried to intervene, and was killed. But Monk suspects that DiMarco may have been murdered while receiving some kind of illegal pay-off. Monk's theory makes him a pariah, as cops are supposed to protect the reputations of their brethren. If Monk has any hope of surviving in his new job, he needs to back up his accusations against Officer DiMarco. When Monk comes across Officer DiMarco's ticket book, he finds the evidence he needs to prove his theory and arrest Manny Alvarez for Officer DiMarco's murder.
Monk finds Manny standing on a scaffold, preparing to work on a window-washing job. Monk explains what happened. Manny didn't spot the Pick Axe Killer. Officer DiMarco did. Monk figured this out when he found DiMarco's ticket book and noticed that a ticket was written - but never submitted - for the killer's car. DiMarco had found the Pick Axe Killer, but as a police officer, he couldn't collect the reward. So he had Manny - an old acquaintance -- take credit for the tip. Manny got greedy and decided to kill DiMarco rather than share the reward money.
Monk has solved the case, but now he's got a major problem. Manny has pulled a gun and ordered Monk onto the scaffold. Manny raises the scaffold and tries to push Monk off! Monk struggles with Manny as his fellow police officers watch from below. Monk wins the struggle and lowers the scaffold back to street level, where his coworkers are waiting. It's clear that Monk was right all along, and Manny is taken into custody.
Despite having solved a murder during his short time back with the police, Monk decides to relinquish his badge. Natalie, who's missed the excitement of working with Monk, agrees to return to her job as his assistant. Monk is disappointed that his return to the force didn't last, but now he knows that he doesn't need a badge to be happy. He can go forward to find contentment in his life with Natalie by his side, solving crime on his own, unique terms.