- "That's enough to make a man believe in miracles. Isn't it, son?" - Lionel Luthor, Mercy
Due to being exposed to the energy from the Crystal of Water, Lionel was transformed into a Kryptonian vessel for the essence of Jor-El, Clark Kent's Kryptonian birth father, and installed with all the knowledge of the planet Krypton.
After the second meteor shower that hit Smallville, Lionel scratched Kryptonian symbols on the floor of the office in the Luthor Mansion, as Lana watched him. In a trance, he told Lana that the Disciples of Zod, Aethyr and Nam-Ek, had come and must be stopped, and cryptically told her that "their home is their poison," giving Lana the information she used to stop the two Kryptonians. Lionel was later put in Belle Reve, due to his unresponsive state, his blank eyes and his creation of numerous Kryptonian symbols of General Zod.
After Clark was shot and killed by Gabriel Duncan, Jor-El possessed a catatonic Lionel, giving him Kryptonian powers in order for the body to carry out Jor-El's commands; Lionel broke out of his cell and retrieved Clark's body, taking it to the Fortress of Solitude, where Jor-El resurrected Clark and restored his powers. Jor-El through Lionel, told Clark he loved him, hoping one day Clark will learn to call him father, setting up the stage for Lionel and Clark's father/son bond, and also warned Clark that giving him back his powers came with a price that one of his loved ones will die and that it would be paid in due time.
Later, Lionel turned up at the Luthor Mansion, completely healthy and conscious; he denied having memory of what happened during the meteor shower. Lionel continued his normal persona, and gave Chloe clever hints about stopping Lex from winning the senatorial race against Jonathan Kent, and about Professor Milton Fine.
As a Kryptonian oracle, Lionel received messages in the form of Kryptonian symbols which he would have pass along to Clark. With each message, he wrote the symbols on sheets of paper, and placed them all in a vault in his office at LuthorCorp. Whenever he received a message, Lionel was overcome with a headache, dropping to his knees and frantically starting to jot the message down on paper.
After Jonathan Kent won the state senate race, Lionel asked for a partnership, but he was refused. He threatened to release incriminating pictures of Clark using his powers, causing Jonathan's temper to rise, resulting in the fatal heart attack to the senator-elect.
Lionel temporarily returned to his status as CEO of LuthorCorp, but was blackmailed by Lex to get out because of possible evidence linking him to Jonathan's heart attack.
With Jonathan gone, Lionel tried to be a friend to Martha as she took the position of State Senator. He also got her out of being blackmailed with footage of Clark using his powers. Later, while viewing the footage, Lionel said to himself, "Your secret is safe with me... Kal-El."
Lionel continued his work at LuthorCorp, but only at an area where he would not take total control of it.
A masked tormentor, Lincoln Cole, took Lionel hostage and orchestrated a series of elaborate games that he had to win in order to stay alive. Cole later brought in Martha to torment Lionel even more. When it came down to one of them killing the other with a gun, Lionel pleaded for Martha to kill him, but she couldn't bring herself to do it. When Lionel tried it on himself, it turned out that the gun wasn't loaded. They were then dropped down in a falling elevator until they were caught by Clark.
As Clark realized that Lionel knew his secret, he confronted Lionel and learned how he knew. Apparently, Lionel knew a great deal about Clark from the day he held one of the crystals that created the Fortress of Solitude. He then told Clark that he only wanted what was best for him and his mother, but Clark did not believe him and told him to stay away. After Clark left, Lionel began channeling Jor-El and started scribbling down Kryptonian symbols.
As Lionel failed to persuade Lex from working with Milton Fine, he again channeled Jor-El and scribbled another Kryptonian message on paper. When the spirit of Jonathan Kent (who was actually Brainiac in disguise) tried to persuade Clark to kill him, Lionel reminded Clark that his father would never make him be a killer. Once Clark realized what he was doing, he fought Brainiac, and Lionel once more began channeling Jor-El who, with one touch, vaporized the Brainiac duplicate. As soon as the Brainiac was gone, Lionel returned to normal with no memory of what happened. He later showed Clark his vault of Kryptonian symbols which neither he nor Clark could decipher. They then joined forces to stop Fine and Lex, and had Chloe scan the symbols into her computer.
Lionel later went to see Martha to explain what happened with Jonathan on the night of his death. In the interim, Chloe's computer compiled the scribbles into three Kryptonian symbols, which, when translated, read as, "Zod is coming."
Lionel gave Martha and Lois the LuthorCorp jet to use to get to a conference in Washington, D.C. He later confronted Clark with another message from Jor-El about Zod instructing Clark to destroy the "vessel" to prevent Zod from being unleashed onto the Earth. Lionel told Clark that every hero's greatest test would be for the benefit of mankind, even if it meant conducting an evil act, but when Clark told him that Lex was Zod's vessel, Lionel went to find Lex. Once he did, he witnessed Lex possessing Kryptonian powers, which Lex demonstrated on Lionel by tossing him onto the hood of his car. Lionel told Clark about the encounter, and when Metropolis had broken out into riots during a powerful power failure caused by Brainiac, he gave Chloe a ride, but they were attacked by angry mobs.