Sokka and Toph are on top of an airship. He directs her to metalbend the rudder so that it will crash into the others. The other ships start to crash, but a firebender comes to the roof and attacks. They escape over the side, using Sokka's sword to slow their fall. However, the curve of the airship prevents them from stopping fully, and they land on the undercarriage, Sokka badly injuring his leg, and Toph falls over the side, grabbing onto Sokka's arm to prevent from falling over. Two firebenders attempt to attack, but Sokka sacrifices his boomerang and sword to prevent them from attacking. More firebenders appear, and Sokka laments that this is the end for himself and Toph. However, the firebenders flee, as an airship collides into them. Escaping onto the new airship, Toph wonders how they escaped, and Sokka realizes that Suki has rescued them.
Aang is still hiding inside of a rock cocoon, which is solely being worn down by Fire Lord Ozai. When he unleashes a massive attack that propels Aang backwards, a small outcropping of rock hits him in the area where Azula struck him with lightning. In a flash, Aang's Avatar state awakens. With the power of his ancestors, he is able to easily deflect Ozai's attacks and gain the advantage in battle. Aang gathers all four elements around him, as the Fire Lord looks on in fear.
In Ba Sing Se, Bumi encounters a brigade of tanks. He earthbends to blow their turrets, and effortlessly stacks them on top of each other. As Pakku, Bumi, Jeong Jeon, and Piandao deal with the rest of the Fire Nation's troops, Iroh solemnly burns the flag of the Fire Nation hanging on the palace of Ba Sing Se.
In the Fire Nation capital, Zuko is lying prone, conscious but unable to fight. Katara attempts to aid him, but Azula interferes and begins attacking her. Katara is able to evade Azula's attacks, but is unable to attack herself. Noticing the sewer under the palace, and a heavy chain on one of the palace doors, she prepares a plan. She tricks Azula into standing above the sewer, then waterbends around them, encasing both women in ice. Katara then melts the ice only around her body, and attaches the chain to Azula's arms and the sewer grating, preventing her from attacking. With Azula subdued, Katara attends to Zuko and heals his injuries. Zuko is able to get to his feet. Azula sobs excessively as she watches.
Ozai is attempting to evade Aang, but is quickly brought down. Aang states that Ozai and his forefathers have devastated the balance, and now, he must pay. However, Aang releases himself from the Avatar State before the attack can be completed. Aang refuses to allow things to end like that. Ozai considers this weakness, and attempts to attack Aang. However, he subdues the Fire Lord. Aang grips Ozai's head and remembers the lion-turtle's words. Before the Avatar, creatures bent not the elements, but the energy of themselves and others. To bend the energy of another requires a spirit to be unbendable itself, else, the one who attempts would be completely corrupted. Aang is able to successfully bend Ozai's own energy. After it ends, Ozai attempts to firebend at Aang, but fails. Aang responds that he has removed Ozai's firebending, so that it couldn't be used to hurt another person again. Aang then returns to the Avatar State, and puts out the many fires across the Earth Kingdom land by bending the sea.
As the comet passes by overhead, Aang is joined by Suki and Toph, aiding a limping Sokka. Sokka is ecstatic at Aang's performance in battle. Suki wonders if he finished the job, to which Aang explains his actions. Sokka and Toph share sarcastic jabs at the fallen Fire Lord. The comet disappears, and the sky returns to night.
Time passes. Back at the Fire Nation capital, much of it destroyed due to the royal sibling's Agni Kai, Zuko is having difficulty putting on his royal robe due to his injuries. Mai appears and helps him with it. She explains that, since her uncle was a prison warden and Zuko is her boyfriend, she was able to pull some strings and get out of prison. They share a kiss.
Greetings are shared outside the palace as the prisoners of war from the invasion are reacquainted. Katara and Sokka reunite with Hakoda. Sokka is overjoyed to see Suki and the Kyoshi warriors reunited, who have now accepted a new member into their ranks: Ty Lee, who bonded while they were imprisoned together.
Inside the palace, Aang and Zuko reflect on how much the world has changed since they first met a year ago. Both men are happy at the thought of rebuilding the world together.
Zuko exits to a cheering crowd, but he states that the real praise belongs to Aang. Zuko officially announces the end of the war. He goes on to state that the road ahead of rebuilding the balance of the world will not be an easy one, but they can do it with the Avatar. Zuko is officially coronated as Fire Lord.
Zuko travels alone to the prison tower, where he meets his father. Zuko tells his father that his banishment was the best thing Ozai had ever done for him, but Ozai questions why he has really appeared. Zuko demands to know the location of his mother.
At the Jasmine Dragon in Ba Sing Se, Zuko happily serves tea to his friends as Iroh plays the horn. Sokka is painting the group to remember all the good times. They are pleased, but question Sokka's lack of drawing skill and his creative liberties, such as drawing Suki firebending. Outside, Aang watches the sunset as Katara joins him. The two share a quiet moment together, and the show ends with them kissing each other.