|Episode(s)|| 7.01 Meet the New Boss|
7.02 Hello, Cruel World
7.03 The Girl Next Door (voice only)
7.04 Defending Your Life (voice only)
7.15 Repo Man
7.17 The Born-Again Identity
And yet... you know what really sucks? It doesn't really matter. Because I won. Your madness won. I mean, look at you. It's hard to believe you were the guy that saved the world once.
– Lucifer, 7.17 The Born-Again Identity
Soon after Castiel declares himself God, Sam begins hallucinating. At first it is simply hearing Lucifer call his name and then hallucinating meat hooks and chains hanging from Bobby's basement, until finally he sees "Lucifer," who tells Sam that his escape from the Cage was all an elaborate torture, and he is still locked away in Hell.
Lucifer continues to taunt Sam on how this world isn't real. He points out that he made this world, because it was the most believable. Sam later confronts Lucifer and asks him why he doesn't end this dream world; Lucifer responds that he will only end it when Sam can no longer take it anymore. Lucifer later changes into Dean and tricks Sam into leaving Bobby's house.
Once at the destination, he reveals himself to prove he can control Sam's "dream." Lucifer is proven to be a hallucination when Dean explains to Sam how to tell the difference between hallucinations and reality. Despite being proven as a figment of Sam's imagination, Lucifer informs Sam that he's not going anywhere.
At Rufus's Cabin, Sam begins hearing Lucifer taunting him that he is still in the Cage and never left.
Sam continues hearing Lucifer's voice, continuing to deal with it by focusing his mind on pain.
While sitting at a diner, preparing to slaughter everyone, Leviathan!Sam and Leviathan!Dean lament about having to be the Winchester's doppelgängers, with Levi Sam telling Levi Dean that it was "nothing but Satan-vision on the inside." The resulting hallucinations did not seem to affect the Leviathan, and appeared to be more of a nuisance than hindrance.
Sam and Bobby talk about how things are going. Bobby asks about Sam's mental state and Sam comments that he has it under control while touching his scar. Bobby doesn't believe this but lets it go.
Sam is seen using his scar to keep Lucifer at bay while dealing with the state of Bobby Singer after Bobby is shot in the head by the Leviathan leader Dick Roman.
Lucifer begins taunting Sam in the motel room, eventually forcing Sam to press hard on his wounded hand until Lucifer flickers away. Later at a crime scene Lucifer tries to help Sam remember a detective's name from their prior case, only to be continually ignored. At Jeremy's apartment, the hallucination gets annoyed by Sam, saying that it chooses to disappear on its own when Sam attempts to squeeze his injured palm.
Lucifer returns once again, trying to tempt Sam into acknowledging his existence while Sam is researching at the local library. While Sam tries to ignore the hallucination, he is eventually forced to talk with his hallucination when Lucifer offers to "help" Sam with the current case, helping Sam realize that they were dealing with Jeremy, the meatsuit of the demon they had been hunting last time, trying to summon the demon back to possess him.
After the case is done, Lucifer appears before Sam once again, forcing him awake. When Sam tries to send him away, the hallucination tells Sam that since he acknowledged his presence, he let him in and nothing Sam can do will get rid of him. Snapping its finger, the hallucination forces Sam to see the entire room engulfed in flames and Lucifer laughs.
Lucifer's torture becomes so bad Sam is put in a mental institution. While there, Lucifer continues to torture him, linking it to when they were in the pit, making him hallucinate maggots in his food and throwing fire crackers at him to keep him up. Eventually, it becomes too much and Sam snaps, his mind so broken that it couldn't be healed (reaching the point where all people that Sam sees are Lucifer). In a last act to redeem himself for his previous actions, Castiel transfers the hallucinations from Sam's mind to his own. Lucifer, uncaring about the change, just calmly says, "Hello brother" and presumably goes on to torture Castiel as he did to Sam.