A demon, Psyches, has taken on the characteristics of Cole's demonic form, Balthazar. Psyches is a demon who likes to kill witches. Psyches wants to impress the Source and move up quickly through the ranks, and heads for Balthazar. Before he can get to them, he has to make them aware of what he is. He begins to kill the covenant of witches, and when the Charmed Ones intervene, Psyches goes after Phoebe, the one thing that will bring Cole/Balthazar to him. To kill his legendary self, says Psyches, "would be an honor."
Psyches, a follower of Cole, has picked up most of what made Cole Balthazar. When the Charmed Ones go to the murder scene of a witch, they notice the scorch marks on the wall, which is Balthazar's mark. Also at the scene is a DA who has the power to shimmer. It is mentioned that Cole has pretended to be a DA to gain access to murder scenes to help in the past. It seems his "alter ego" has decided to do the same. When Emma (a girl whose fiancée is killed by a demon who looks like Psyches/Balthazar) confronts Cole with the murder of her fiancée, Cole admits to Phoebe that he did indeed kill him, as the knife she has is his, although he doesn't remember doing it nor what he looked like. Phoebe reminds Cole that he is good now. Seeing as Psyches emulates Balthazar, Cole thinks like him and figures out what it is he is planning and where he will go next. In the end, Balthazar is killed for good, leaving Cole with no powers, no ability to shimmer, no demons trailing him and the Source's radar on him off. He now must learn what to do with himself, and just who he is now.
Phoebe has to listen to her heart after Cole proposes to her. Having just slain the Scavenger Demon (eats the remains of other demon's dead), Cole admits it was brought on as a result of the heat of the moment, but that he meant it, and wants her to be with him wherever life leads. Phoebe cannot answer him. She confides in Piper that she never saw herself as the marrying type. Piper admits that it wouldn't be right to have a demon in the family. Phoebe volunteers to act a decoy from Psyches after she receives a premonition that the deceased witch's friend is the next witch on his list (demons kill whole covenants). He attacks, and some girl (Emma) appears to help kill him with what she says is the ceremonial knife. The demon who killed Emma's fiancée left it behind, and she is looking for that demon, ready to kill him. She believes that the demon was Psyches. When Emma sees Cole as Balthazar, however, she recognizes him as the killer. Phoebe tries to explain to Emma that Cole is good now, and that she puts herself at more of a risk by destroying him. In the end, Phoebe tells Cole that she loves him, but has issues she must resolve before getting married.
Learning that Cole is Balthazar leaves Paige unsure of how she now views Cole. In the end, Paige still has her doubts, and doesn't want Phoebe marrying Cole.
Recent talks of having a baby have the two disagreeing. Piper feels that until it's safe, they shouldn't bring a baby into the world they now live. Leo thinks they can make it work. When Paige brings them a mechanical baby from the clinic, Piper shows concern, but it is Leo who takes it seriously, and when the baby is "injured" to the point of not working because of Psyches, they both agree that waiting is for the best.
Leo brings the deceased witch's friend to Halliwell mansion after the supposed DA (actually Psyches) tries to kill her. Cole knows that the only way to defeat Psyches is for Cole to embrace totally the demonic self of Balthazar. When Psyches follows Leo and the friend, Cole turns into Balthazar to defeat him. He gets away, but luckily, Paige is able to get some flesh from Psyches to put into the potion to vanquish him after Piper freezes them. Emma is at the house, and sees Cole turn himself into Balthazar. She then realizes that it is Balthazar, not Psyches, who killed her fiancée. She is now after Balthazar, although Phoebe and the rest of them try to make her see Cole, the innocent. Before Cole decides to check the mausoleum for Psyches, he tells Phoebe to have her Balthazar vanquishing potion ready just in case he can't come back from the other side. He makes her promise to use it, as he may not be able to turn back into Cole after defeating Psyches. When Psyches isn't at the mausoleum, Cole realizes that he has gone after the one thing that will force Cole to come: Phoebe. Psyches really isn't after the Charmed Ones - he wants Cole. Cole changes again into Balthazar, using all of his power, and with Phoebe's prodding, defeats Psyches. Knowing Balthazar is the demon that killed her fiancée, Emma stabs Balthazar with the ceremonial knife, killing Balthazar forever. She then goes after Cole, throwing a potion, which happens to be a power-stopping potion, leaving Cole without his powers, but alive.