The unidentified character is the culprit behind two murders and a kidnap, crimes which have currently been pinned on Michael Farmer (played by Scott Reid) by chief investigator Roz Huntley (Thandie Newton).
Questions were soon raised about whether or not he is simply a convenient scapegoat as Michael is a known sex offender.
And many viewers have started to think Roz’s husband Nick Huntley (Lee Ingleby) is in fact the serial killer.
One fan wrote on Twitter: “Another great episode. An hour where I don’t move! Starting to suspect Huntley’s husband as #balaclavaman #LineofDuty.”
“I predict DC Huntley’s husband is Balaclava Man #LineofDuty #FreeMichaelFarmer,” said another.
A third claimed: “Huntley’s husband is balaclava man. He was outside the flat in the black car and killed him. #LineofDuty
“I reckon that #BalaclavaMan is Huntley’s husband. #LineofDuty,” added one fan.
Episode two picked up the morning after last week’s nail-biting cliffhanger, which saw DCI Roz about to get killed by her colleague and forensics coordinator Tim Ifield (Jason Watkins).
But, in last night’s instalment of the BBC programme, Tim was the one who got the chop in an unexpected turn of events.
After the encounter, Roz was seen desperately trying to cover her tracks and point the finger in another direction as she replaced evidence in a bid to get herself in the clear.
To help discredit her murder victim even further, she suggested that it was Tim who was behind the gruesome murders of several prostitutes.
All the while, Roz was being investigated by AC-12 over Operation Trapdoor.
Line of Duty airs on BBC One on Sundays at 9pm.