At the beginning of the day, the recruits practice yoga. Later, Owen teaches the importance of avoiding surveillance. Alex is later approached by Angie, another instructor, who tells her to clear out her bank account. During an exercise, the recruits are tasked with surveying each other. Instead of watching Alex, Dayana took a call from work. After the day ends, Alex and Ryan meet their handlers; Shelby and Nimah. Lydia then tells Alex that she admires her perseverance and tells her to continue working hard at the Farm.
The CLF move all of the hostages to Federal Hall. Forcing every hostage to put a collar around their neck, they warned the hostages that if their collars would strangle them to death if they tried to escape. Raina and Ryan, assuming that the CLF is disguising it's own members, formulate a plan to identify a CLF member. Raina marks one terrorist. As a response, the CLF mark every other hostage including Raina.
Meanwhile, Alex encounters the police officer who let her into the building. She successfully makes her way to a secret NYPD bunker although the cop is killed by a CLF member. Alex calls Miranda, telling her about the crisis. However, it was revealed that Miranda was conspiring with the CLF after contacting one of it's members.
- Priyanka Chopra as Alex Parrish
- Jake McLaughlin as Ryan Booth
- Aunjanue Ellis as Miranda Shaw
- Yasmine Al Massri as Nimah and Raina Amin
- Johanna Braddy as Shelby Wyatt
- Russell Tovey as Harry Doyle
- Blair Underwood as Owen Hall
- Pearl Thusi as Dayana Mampasi
- Aarón Díaz as León Velez
- Tracy Ifeachor as Lydia Hall
- David Lim as Sebastian Chen
- Candi Boyd as Angie Reynolds
- Jason Tottenham as Jason Bowling
- Aaron Lazar as Paul Burton
- Renan Kanbay as Millie Metzger (uncredited)
- The title of this episode, Lipstick is a CIA cryptonym for a former covert operation that incorporated surveillance tactics for key intelligence targets based in Mexico City.