The villain is a Nazi, who likely has traveled through time, or appears young for whatever other wild reason though he's over a hundred years old. That is never really explained, and it hardly matters, since the story soars on other big wings.
The Nazi worked with Robert Bischoff back in the 1930s. Bischoff soon left Nazi Germany and came to the U.S. He changed his name to Bishop in the United States - he's Walter's father. The Nazi in our present has taken his and Bischoff's work, and built a weapon that can kill specific human groups, based on their DNA. "All of Hitler's dream in one little toxin," as Peter puts it.
But for the first time in the series, Walter is furious with Peter, and won't accept his apology - Peter sold Robert's books, 10 years ago, ostensibly for money, but as Peter explains to Olivia the deeper reason was the resentment Peter had for Walter back then. And now Walter, ever perceptive, may understand this full well. That, combined with the genuine loss Walter feels for his father's missing books, fuels his anger. It was one of the most genuine, humanizing moments in the series, grounding Walter and Peter in a family relationship that is now as real as it's been bizarre.
I also liked Walter saying he'd like Olivia to be his daughter-in-law - I've been saying for a while that I see a romantic relationship in Peter and Olivia's future.
Meanwhile, Walter figures out to create a toxin that specifically targets the Nazi, who succumbs before he is able to unleash another attack. Peter returns what he is able to find of Robert's books, and their relationship is repaired. But neither yet knows that the Nazi in our present was a hundred years old, looking as young as he did in the photo of Robert and him in the 1930s. (A commenter on Facebook asked me if thought Walter may have known that the Nazi was a hundred years old, but didn't want to tell Peter. I certainly think this is a possibility - and perhaps Walter's silence is related to the Nazi's possible connection to Peter's alternate universe, which Walter clearly does not want to talk about.)
That's what I call one fine science fiction story.
5-min podcast review of Fringe
See also Top Notch Return of Fringe Second Season ... Fringe 2.2 and The Mole People ... Fringe 2.3 and the Human Body as Bomb ... Fringe 2.4 Unfolds and Takes Wing ... Fringe 2.5: Peter in Alternate Reality and Wi-Fi for the Mind ... A Different Stripe of Fringe in 2.6 ... The Kid Who Changed Minds in Fringe 2.7 ... Fringe 2.8: The Eternal Bald Observers ... Fringe 2.9: Walter's Journey ... Fringe 2.10: Walter's Brain, Harry Potter, and Flowers for Algernon ... New Fringe on Monday Night: In Alternate Universe? ... Fringe 2.12: Classic Science Fiction Chiante ... Fringe 2.13: "I Can't Let Peter Die Again"
See also reviews of Season One Fringe Begins ... Fringe 2 and 3: The Anthology Tightrope ... 4: The Eternal Bald Observer ... 7: A Bullet Can Scramble a Dead Brain's Transmission ... 8. Heroic Walter and Apple Through Steel ... 9. Razor-Tipped Butterflies of the Mind ... 10. Shattered Pieces Come Together Through Space and Times ... 11. A Traitor, a Crimimal, and a Lunatic ... 12, 13, 14: Fringe and Teleportation ... 15: Fringe is Back with Feral Child, Pheromones, and Bald Men ... 17. Fringe in New York, with Oliva as Her Suspect ... 18. Heroes and Villains across Fringe ... Stephen King, Arthur C. Clarke, and Star Trek in Penultimate Fringe ... Fringe Alternate Reality Finale: Science Fiction At Its Best