With guidance from Avatar Roku's spirit and Fire Lord Sozin's final testament, Aang and Zuko respectively learn about Roku and Sozin's childhood friendship. Sozin suggested to Roku upon his return from mastering the elements that the Fire Nation should expand their empire to ensure global prosperity. As the Avatar, Roku knew the importance of balance between all nations and vehemently disagreed. Some time later, upon seeing a Fire Nation colony in Earth Kingdom territory, Roku swiftly defeats Sozin but spares him in honor of their past friendship and warns that further dissent will result in his demise. Twenty-five years later, Roku's volcanic island home erupted, prompting Sozin to race to help his old friend. At the last moment, with Roku suffocating from volcanic gases, Sozin realized that he could set his plans in motion if he let Roku die and abandoned him. Roku perished and was reincarnated as Aang. Sozin knew that the next Avatar would be an Air Nomad, leading to the destruction of the Air Temples, but found that Aang had eluded him. Confronting Iroh in his prison cell, Zuko learns that Avatar Roku was his mother's grandfather, symbolizing the battle of evil and good within Zuko to cleanse the sins of their family. Aang meanwhile discusses with his friends that Roku and Sozin's story shows that anyone is capable of great good and great evil, and that Ozai and the Fire Nation must be treated humanely.

Katara expresses her disapproval when Toph and the boys begin scamming Fire Nation street gamblers for quick cash. Toph thinks Katara is acting too motherly, and a rift forms within the group when Sokka finds a wanted poster of Toph naming her 'The Runaway'. After overhearing Sokka discuss Katara's motherly instincts after the death of their own mother with Toph, Katara decides to pull a scam with Toph to patch things up. Katara plans to turn Toph in and collect the reward money, with Toph metalbending her way out of jail. The plan fails when Toph is placed in a wooden cell, soon followed by Katara at the hands of Zuko's assassin. He uses them as bait in an attempt to kill Aang, but Katara brilliantly uses her own sweat to waterbend herself and Toph out of the cell. The group subdue the assassin long enough to escape the town, with Sokka nicknaming their pursuer "Combustion Man".

The gang discovers that there have been strange disappearances in a nearby Fire Nation town during the full moon. They befriend an elderly innkeeper named Hama, who reveals that she is a waterbender from the Southern Water Tribe who had been taken away sixty years ago alongside her fellow waterbenders. She becomes Katara's mentor and shares with her the tragic story of her life as a longtime prisoner of the Fire Nation, as well as new waterbending techniques, such as pulling water out of thin air or plants. Katara later discovers that Hama is enacting her revenge by kidnapping Fire Nation civilians with bloodbending, a sinister waterbending technique which manipulates the water in a person's body to cause them great pain and take over their actions. Katara battles Hama while the rest of the group find the group of villagers locked in a cave. Aang and Sokka go back to stop Hama while Toph frees the villagers. Katara is eventually forced to use bloodbending on Hama to save Aang and Sokka. Toph arrives with the villagers, who arrest Hama. As she is led away, Hama gleefully congratulates Katara on learning bloodbending. Katara weeps while Aang and Sokka comfort her beneath the full moon.

The group arrives at the rendezvous point for the invasion, with four days to spare. This realization causes Aang to become increasingly stressed about confronting the Fire Lord. After having a nightmare about a failed invasion, Aang comes to believe he is not fully prepared and sacrifices his sleep and sanity in order to train. After three days of no sleep and continuing nightmares and hallucinations, it takes the collaboration of Sokka, Toph and Katara to convince Aang to trust his preparation. Meanwhile, Zuko enjoys time spent with Mai and a pampered lifestyle in the palace, but becomes anxious upon learning that Azula has been invited to an upcoming war meeting while he has not. Not wanting to show up uninvited, Zuko decides not to go, but is ultimately requested to attend with a seat at his father's right hand. After the meeting, Zuko leaves visibly shaken, and confides with Mai that it was what he always wanted, but he did not feel like himself.

Part 1: The Invasion: On the day of the eclipse, many allies featured in previous episodes, including the swampbenders, Haru and his father, the Mechanist and his son Teo, and Pipsqueak and The Duke reunite with Team Avatar to launch the invasion of the Fire Nation. Aang kisses Katara as a sign of his strong feelings for her, worried that he may not return. Meanwhile, Zuko leaves a letter to Mai, and tells a portrait of his mother that he is finally going to set things right. The invasion force successfully circumvent several layers of Fire Nation defenses and reach the capital shores, where they begin a grueling assault towards the palace under constant onslaught from Fire Nation forces. Katara and Sokka's father Hakoda is injured in battle, forcing Sokka to assume command of their forces. Aang reaches the Fire Lord's palace, only to find both it and the entire capital city abandoned.

Part 2: The Eclipse: Aang, Sokka and Toph search for the Fire Lord inside his secret bunker under the volcano but find only Azula, who simply flees with help from Dai Li agents, trying to stall them until the eclipse concludes. Elsewhere, Zuko confronts his father, denouncing Ozai's treatment of him as cruel, praising Iroh's teachings and fatherly guidance, and revealing his plan to join the Avatar and help him defeat Ozai. As Zuko tries to leave, Ozai reveals what happened to Zuko's mother Ursa to keep him in place: she learned that Zuko's grandfather, Fire Lord Azulon, had commanded Ozai to kill Zuko as punishment for Ozai trying to circumvent Iroh's birthright to the throne. Ursa proposed to remove Azulon so that Zuko would be spared and Ozai would inherit the throne, which Ozai accepted on the condition that she be banished for treason. As Ozai finishes the tale, the eclipse ends and he attacks Zuko with lightning; Zuko redirects it back at him as taught by Iroh and flees, intent on freeing his uncle. However, Iroh has already escaped prison by the time he arrives. The Fire Nation counterattacks with an advanced fleet of airships and war balloons. The exhausted invasion force has no choice but to surrender. Aang flees with his friends at the urging of Hakoda, alongside the youngest members of the invasion force, to the Western Air Temple with Zuko following in a stolen balloon.

Zuko approaches Aang and his friends at the Western Air Temple, with the intention to join their group and teach Aang firebending. He desperately tries to prove to them that he has changed for the better, however they furiously reject Zuko due to his past actions. After he leaves, Toph challenges the others for dismissing him so quickly when Aang is in desperate need of a Firebending teacher. She eventually decides to speak to Zuko herself, but she accidentally startles him in his sleep, causing Zuko to reflexively firebend at her and burn her feet. Toph crawls back to the temple for help, where Sokka decides they must go after Zuko in retaliation. Team Avatar is nearly killed upon the sudden arrival of Combustion Man, but Zuko intervenes and affects his aim just enough to save them. Sokka defeats Combustion Man by hitting him in the third eye with his boomerang, causing the assassin to blow himself apart. While the group does allow Zuko to join them, they are still reluctant and skeptical. An embittered Katara warns Zuko that she will kill him if he betrays them or hurts Aang again.

Zuko tries to teach Aang how to firebend, but he has lost his own ability to bend as he is no longer reliant on rage, the previous source of his firebending. Toph suggests they learn from the original source of firebending, revealed to be the dragons, who first imparted their knowledge to a seemingly-extinct civilization called the Sun Warriors. Aang and Zuko travel to Sun Warriors' ruins, where Zuko reveals that Sozin began the tradition of hunting dragons for glory to the point of extinction, with the last dragon being conquered by Iroh. After being caught in a trap, Aang and Zuko discover the Sun Warriors still exist. The chief agrees to teach them the ways of the Sun, having the pair each carry a sacred flame up the mountain to meet the masters Ran and Shaw, a pair of surviving dragons. The dragons deem Aang and Zuko worthy after they successfully perform an ancient routine called 'The Dancing Dragon' they learned along the way, and engulf them in a column of rainbow fire; Aang and Zuko realize that fire can bring energy and life, not just destruction. The tribe tells the pair that Iroh was the last outsider deemed worthy by the dragons, and claimed to have killed the final dragon to protect Ran and Shaw. Both Aang and Zuko begin to firebend again, stronger than ever before.

Part 1: To find Sokka's father Hakoda, Sokka and Zuko infiltrate the Fire Nation's top prison, the Boiling Rock, located on an island surrounded by a boiling lake. Unfortunately, they crash their balloon on arrival and cannot easily leave. They disguise themselves as guards and begin asking around about Water Tribe prisoners; while there are none, the pair discovers Suki is in the prison. Zuko's cover is blown while Sokka and Suki reunite, and the warden, who turns out to be Mai's uncle, recognizes him. He informs Zuko that in due time he will be handed back over to Ozai. A fellow prisoner, Chit Sang, overhears Sokka, Suki and Zuko discussing their escape plan, and forces his way in. Sokka plans to use one of the insulated coolers, used to punish prisoners who firebend, as a boat to cross the lake. As they prepare to leave, Sokka and Zuko overhear that a new batch of prisoners will arrive at dawn, potentially including Hakoda. Sokka, Suki and Zuko decide to stay behind and wait, while Chit Sang sets sail in the cooler but is soon caught. Hakoda is revealed to be among the new prisoners.

Part 2: Sokka reunites with his father and begins brainstorming a new escape plan: They decide to take the warden hostage during a prison riot and escape on the gondola to the other side of the lake. Chit Sang is interrogated and reveales that a disguised guard helped his attempted escape, but claims it is a guard who had previously placed him in the cooler to save Sokka, and rejoins the group after starting the riot. Mai arrives and confronts Zuko about breaking up with her through a letter, calling him a traitor to the Fire Nation. When the commotion of the riot breaks out, Zuko traps Mai in a cell and leaves to help his friends. Suki kidnaps and ties up the warden, and the group successfully board the gondola, but are pursued by Azula and Ty Lee. The warden breaks free and orders his guards to cut the gondola's cable line. Azula and Ty Lee escape to watch the group's demise, but Mai intervenes at the last second to subdue the guards and allow their escape. Mai calmly tells Azula that she loves Zuko more than she fears her. In retaliation, Azula moves to strike Mai, but is chi-blocked by Ty Lee. Azula furiously orders both of them to be thrown in prison. Sokka and Zuko return to the Western Air Temple with Hakoda, Suki, and Chit Sang by stealing Azula's airship, reuniting Katara, Sokka, and Hakoda once again.

Part 1: The Phoenix King: Aang has decided to fight the Fire-lord after Sozin's Comet passes, needing more time to master firebending. Zuko derails this plan by revealing that Ozai intends to burn the entire Earth Kingdom continent to ashes with the comet's power, having learned of this plan from the war meeting on the day before the eclipse. The gang begins a frantic training regimen while Aang struggles with his responsibilities: his friends instruct him to simply kill Ozai, but Aang clings to the pacifist beliefs of his Air Nomad heritage. In his sleep, Aang is drawn towards a mysterious island and is followed by Momo. The next day, Aang's friends search all of Ember Island for Aang with no success. Desperate, Zuko takes them to find June the bounty hunter to attempt to locate Aang. June's pet shirshu is unable to track Aang's scent at all, leading June to say that Aang no longer exists but is not dead. Ozai bequeaths the Fire Nation throne to Azula and declares himself "The Phoenix King", supreme ruler of the world, while Aang awakens on the unknown island.

Part 2: The Old Masters: On the island, Aang seeks guidance from his past incarnations, but they too suggest he may have to take violent action against the Fire Lord to protect the world. Zuko asks June to find Iroh using an old sandal; she leads them to the outer wall of Ba Sing Se. There they meet King Bumi (who escaped and liberated Omashu during the eclipse), Jeong Jeong, Master Pakku, and Master Piandao, all of whom are revealed to be members of the Order of the White Lotus, a secret society led by Iroh that "transcends the division of the four nations". Zuko and Iroh tearfully reunite, with Iroh revealing his pride in Zuko for discovering his own path to redemption. The team decides to split up to stall the Fire Nation's plans, realizing that Aang will have to face Ozai directly: Katara and Zuko will face Azula at the Royal Palace; Sokka, Suki and Toph will attempt to stop the airship fleet bound for the Earth Kingdom, and Iroh is to lead the White Lotus in the liberation of Ba Sing Se. The island Aang is on is revealed to be a giant lion turtle, who passes on his wisdom to Aang before leaving him on the shores of the Earth Kingdom to wait for Ozai. As Sozin's Comet arrives, Ozai's airship fleet appears over the horizon with Aang standing ready.

Part 3: Into the Inferno: Abandoned by her friends and father, Azula's mental stability begins to deteriorate as her coronation as Fire Lord approaches. She banishes much of her court, fearing everyone will betray her. Sokka, Suki and Toph arrive just as Ozai's airship fleet is lifting off, successfully boarding a ship with the help of Toph. They overpower the ship's crew and begin to take down the fleet. Iroh and the White Lotus arrive at Ba Sing Se to wipe out the Fire Nation presence once and for all. Zuko and Katara confront Azula at her coronation, where Azula challenges him to an Agni Kai. Their fighting engulfs the palace, and when Zuko gains the upper hand, Azula decides to target Katara with a lightning strike. Zuko jumps in to protect her and is badly wounded. Meanwhile, Aang finally confronts Ozai, but is quickly put on the defensive without the Avatar State. Aang is presented with an opportunity to redirect Ozai's lightning back at him, but chooses not to strike. Continuously forced to retreat by Ozai, Aang is seemingly trapped while taking refuge inside a ball of rock as Ozai tries to force him out.

Part 4: Avatar Aang: The Order of the White Lotus liberates Ba Sing Se, while Sokka, Suki and Toph disable the Fire Nation attack armada. Katara takes over fighting Azula, eventually immobilizing her in ice to chain her to a grate in the ground, then rushes to heal Zuko. They watch with pity as Azula suffers a full mental breakdown. Ozai accidentally causes Aang to enter the Avatar State by knocking him into a rock that pierces his lightning wound, unlocking his chakras. Aang easily overwhelms Ozai, yet still refuses to kill him, instead harnessing "energybending", learned from the lion turtle, to permanently strip Ozai of his firebending abilities and render him powerless. In an epilogue sequence, newly crowned Fire Lord Zuko declares the war over. He and Mai reconcile, and he confronts his father in prison, angrily asking where his mother, Ursa is. Ty Lee is shown to have joined the Kyoshi Warriors while teaching them chi-blocking from prison. Some time later, "Team Avatar" celebrate together at Iroh's tea shop in Ba Sing Se. Slipping out to share a quiet moment together, Aang and Katara embrace and kiss under the sunset.