Warning: Major SPOILERS ahead for A Series of Unfortunate Events season 2, plus one big spoiler for season 3...
A Series of Unfortunate Events is a show full of mysteries, but one of the biggest mysteries left over at the end of season 2 is that of who the elusive former Madame Lulu is. Allison Williams' casting was announced very recently, with no character name attached, but the final moments of this season reveal her as the previous Madame Lulu, who handed over the role to Olivia Caliban (Sara Rue), and returns to find Caligari Carnival in flames. Her true identity isn't revealed, but Lemony Snicket (Patrick Warburton) says that she is "a woman I know very well."
The natural assumption for viewers who haven't read the books is that Williams is playing the mysterious Beatrice, since Count Olaf (Neil Patrick Harris) indicates earlier in the "Carnivorous Carnival" two-parter that Beatrice survived his murder attempt. However, those who are familiar with the source material will be able to deduce the truth: Williams is actually playing Kit Snicket, Lemony's sister.
Related: The Truth Behind Beatrice
Yes, after introducing Jacques Snicket (Nathan Fillion) in season 2, and then killing him off, A Series of Unfortunate Events reveals the third and (as far as we know) final Snicket sibling just in time for season 3. Kit Snicket, like her brothers, is a member of the mysterious secret organization V.F.D., and she is currently in possession of the Sugar Bowl - though the true nature of this much sought-after object remains unclear.
We won't give away too much about Kit Snicket just yet, but she will end up crossing paths with the Baudelaires in season 3 - which will be the final season of the show, adapting the final four books in the series. Like the other members of V.F.D. whom we've met so far, Kit is armed with curiosity and a well-defined moral compass indicated by a concern for children, and Olivia Caliban describes her as "our bravest agent in the field."
Kit was serving in the role of Madame Lulu - which is actually a rotating disguise used by various V.F.D. members in order to gather information - but handed the character over to Olivia so that she could head to Heimlich Hospital and retrieve the Sugar Bowl. If you look closely in the scene where Kit departs, you can see that she's wearing a scarf patterned with the same symbol that Olaf and Jacques have tattooed on their ankles - which looks like an eye, but is actually a stylized depiction of the letters V.F.D. In the books, Kit has the same tattoo on her ankle, as do all of the V.F.D. members.
A Series of Unfortunate Events season 2 is available now on Netflix.