Fringe/Recap/S01 E04

Season 1, Episode 4:

The Arrival
A vibrating cylinder made of solid iridium arrives in the middle of a construction site. As Walter and Peter try to determine what it is, Olivia and Broyles investigate a mysterious individual who has appeared at the site of every Pattern-related yet: a man, pale, bald and with no eyebrows, dressed in a black suit and fedora and known as "the Observer". She also follows up a similar investigation conducted in the mid 90s, where an identical cylinder appeared and then disappeared into the Earth exactly 48 hours later.

During his research, Walter tricks Peter into leaving, gives Astrid a sedative, steals the cylinder, hides it and meets with the Observer, on whose orders he was acting. When the FBI catch up with Walter, he refuses to divulge where he hid the cylinder and only makes cryptic references to his meeting with the Observer. Peter, who has been growing steadily more and more fed up with his father, quits the Fringe Division task force. As this is happening, another individual named John Mosely attacks an NSA field office where the cylinder was initially brought, using some kind of advanced weapon. Mosely later abducts Peter and hooks him up to a machine that allows him to read Peter's thought and somehow learn the cylinder's location, even though Peter doesn't know that information.

When Olivia learns that Peter has been abducted, Walter realises what has happened and tells her where the cylinder is. She arrives just in time to stop Mosely from killing Peter or escaping with the cylinder by fatally shooting him. Moments later, the cylinder disappears into the earth with a flash of bright light. The Observer watches all this happening -- and is ambushed by Peter, who demands answers.

"Peter: Who the hell are you? What is the cylinder?

[They begin to speak at the same time:]

The Observer and Peter: You know what it is, don't you? Why is it here? Why now? Who are you? [Peter tests the Observer:] Apples, bananas, rhinoceros! I wanna hold your hand! Lucy in the sky with diamonds!

[The Observer begins to speak on his own, but clearly saying what Peter is thinking:]

The Observer: Do you really know my father? Did you talk to him this afternoon? Are you his friend?"

The Observer draws a high-tech airgun and shoots Peter, which knocks him unconscious. Once he's recovered in hospital, Peter is determined to stay with Fringe Division, now believing in the Pattern and determined to figure out what's going on. At home, Walter confesses why he did what he did: many years ago, Walter and Peter were in an accident and almost drowned in icy water, but they were saved by the Observer. Keeping the cylinder safe from Mosely was Walter's way of repaying his debt to the Observer, though he doesn't entirely understand how he knew this was what the Observer wanted.

At the end of the episode, Olivia returns home and sees John Scott standing in her kitchen.