Angel recognizes Gunn's strength and often calls on him if he needs back up in battle or if he needs protection for the people he cares about when he cannot protect them himself. Although he initially regards his time with Angel Investigations as a "paying side-gig," Gunn eventually becomes a full-time member of the gang, gaining mutual respect for those he fights side-by-side with while finding his place in the world. However, his work with his new 'family' often leads to conflicted loyalties; in the episode "Belonging." Cordelia is accidentally sucked into a portal to Pylea while a member of Gunn's old street crew, George, succumbs to the bite of a vampire. Gunn feels responsible for his friend's death, believing that it would not have happened if he had still been around to help in the fight. Yet even in his grief, he realizes that he could not commit the same crime twice and allow Cordelia to suffer the same fate, so he joins Angel, Wesley, and Lorne to rescue her.

A short time after their return from Pylea, demons across the city are being massacred and Gunn comes to the conclusion that his old gang is responsible for the deaths (cf. "That Old Gang of Mine"). He realizes that his ties with his old life are gone and that his loyalty now lies with the vampire with a soul. In a showdown with one of his lifelong friends, Gunn finally chooses the mission of the Angel Investigations team. Without realizing it, Gunn finds the future he thought he would never have. He has friends, loyalty, respect, and a mission to pursue. He even finds love in the arms of the new girl Fred Burkle, but his past still comes back to haunt him in the episode "Double or Nothing," when the demon Jenoff decides it is time to cash in on the deal Gunn had made years earlier by claiming Gunn's soul. Luckily, Angel and the others at Angel Investigations are able to aid Gunn and defeat Jenoff, allowing Gunn the luxury of living his life to the fullest.

Fred becomes the most important person in Gunn's world, but Gunn's devotion suffers the ultimate test in the episode "Supersymmetry" when he kills Professor Seidel, the person responsible for deliberately sending Fred to Pylea, in order to save Fred from having to carry the burden of doing it herself. The guilt of what he had done for her plagues Fred and instead of bringing them closer together, it begins the rut that leads to the end of their relationship. Although no longer romantically linked, Gunn and Fred continue to fight side-by-side, and Gunn has a fling with the electric Gwen Raiden in the episode "Players." When Wolfram & Hart want to cut a deal to have Angel take over the LA branch, Gunn is led into the mysterious White Room where he is exposed to the mysterious conduit to the Senior Partners, who impresses Gunn with his immense power. Soon, he undergoes a remarkable transformation at Wolfram & Hart.