The final season premieres after being presumed dead by the outside world, the sisters cast a spell so that their appearance is altered to the outside world, but not to those closest to them. Though Phoebe and Piper begin to adapt to a magic-free life, Paige cannot escape her Whitelighter half, which continues to tell her that there is a new charge in the world that needs her. There are also those who do not believe the Halliwells to be dead, and seek to prove it. Paige has trouble locating her charge, and when she finally catches up with the young witch, she finds that Billie has embarked on a solo vigilante career to do good and combat demons, but soon finds she has gotten in over her head.

Hoping to lure the Charmed Ones out of hiding, Haas, a young demon suspecting they've survived and wanting to take over the rule of the Underworld by taking their powers, uses the Alice's Adventures in Wonderland fairy tale to prey on victims. Paige's new charge in her whitelighter career, an attractive blonde college student with enviable martial arts skills, Billie Jenkins embarks on a career as a white witch vigilante fighting demons in leather and mask, and soon stumbles onto the wonderland victims, and eventually ends up in over her head after spurring help and contact from Paige. Consequently, Paige takes training as a police recruit, hoping to satisfy her continuing need to fight evil while Phoebe and Piper masquerade as cousins of themselves and humorously end up in positions with the paper and at the P3 club doing pretty much what they had done before faking their deaths. Paige gets the hots for one of her instructors and is happy to have to leave training to rescue Billie and begin not just one, but two new relationships, both of a much more satisfactory nature, though still wonders what to do for work.

Looking for a new career path, Piper goes on an interview with a corporate recruiter, but is soon arrested when a background check reveals that the physical appearance she adopted was that of a model wanted for murder. In fact, the model was innocent, framed by her obsessive and evil ex-boyfriend who is a crooked assistant District Attorney on the take reacting to being abandoned and set her up least she give evidence against her. The Charmed Ones, with Bille's help, must come up with a plan to save her once they switch her into Piper's jail cell and discover the truth. Consequently, they intervene first to prevent her murder and then taking inspiration from none other than the Demon of Fear, Barbas—conceive a plot to have the District Attorney implicate himself on tape in the murder, freeing his ex-lover from the threat of retribution.

Wyatt's school play Cinderella brings out the competitive nature in Piper when her hand-sewn costume and parenting abilities are criticized by another mother. Things go from bad to worse when it is revealed that this Stepford-wife-like "Oh-so-perfect" mother is in fact possessed by a demoness focused on kidnapping Piper's son Wyatt and using him in a plot with other demons to resurrect the Source of All Evil at Magic School; which the demons have forcibly taken possession of after the (believed and faked) deaths of the three Charmed Ones. Meanwhile, Paige sees Dex with another woman, who turns out to be his ex-girlfriend who is a compulsive liar, and despite Phoebe's objections, interferes by masquerading as the woman and expecting evidence Dex is two-timing Phoebe. Dex apologizes to Phoebe after Paige commits her interfering faux pas and her masquerade crashes, saying he probably shouldn't have stayed in touch with and should have made a more complete break with his old girlfriend, earning points for earnestness and honesty. Meanwhile, Billie and Leo sniff out the plot at magic school and research a spell to return Billie to our world for power-of-three reinforcements while Leo stays nearby with Wyatt who has accompanied the possessed mother there. With Wyatts powerful help, the demoness has conjured the source who appears to be fully resurrected and ready to take command again in the Underworld. Billie's timely return with Paige, Phoebe and Piper enables the three to intervene in the demon's festivities. Piper vanquishes both threats by dealing with the demoness—who has linked the two by her conjuration of the source which consequently was not as powerful and troublesome as the original incarnation of source because the magical link to the demoness gave it a new vulnerability.

Unaware that she is being watched, Billie jeopardizes the Charmed Ones' new lives when Agent Murphy of Homeland Security, who has suspected all along that she and the "cousins" are involved in supernatural activities and that the Halliwell sisters are not dead, spots her using her powers to save an innocent. Meanwhile, Phoebe's planned overnight trip with Dex starts with an unexpected assist from Billie and comes to a surprising conclusion when Billie casts a spell from the book of shadows intending to help and to make her happy, with unexpected consequences. Both Paige and Phoebe, having repeatedly questioned the manner the three are living conclude that the situation is untenable as they are constantly living a lie with those they would trust, and innocents are suffering as well. As that happens, Agent Murphy having already approached Billie, confronts Piper and makes plain that he feels the world needs their continued ministrations. Billie sets a trap for the Demons and vanquishes the imp-master while the power of the three vanquish its master from ambush. At the end of the episode, the three agree that the masquerade should be canceled and uncast the magic which had disguised them. Approaching Agent Murphy, the three cut a deal to have him cover for them explaining away the inconvenience of their faked deaths as being due to national security concerns which allows them to resume life as themselves.

While the Charmed ones are dealing with paparazzi and Halloween, armed and ready to vanquish, Billie inexplicably freezes and is flooded with childhood flashbacks when she sees her latest demon target, the Dogan. Billie casts a spell to erase her fears and goes after the demon, and realizes that her sister Christy was kidnapped by demons when she was only a child.

Wanting to return to her old career as a social worker, Paige's plans get put on hold, when her Whitelighter father, Sam, returns asking for her help with his charge. Meanwhile, Piper and Leo go to see a magical marriage counselor who thinks the best therapy is for them to walk a mile in each others' shoes – literally.

Agent Murphy gives the sisters their first Homeland Security case – searching through cold case files, where Phoebe and Billie discover a belt that gives Billie superpowers. Meanwhile, Piper and Leo are on the hunt for a band to play at P3; and Paige, while trying to save a new charge from his criminal peers, meets her new charge's parole officer Henry.

Phoebe has decided to take a hiatus from men. Piper seems to think Agent Murphy and the government are hiding something from the sisters. She and Paige discover that an experiment with a captured demon created a deadly virus that is infecting the magical community, including Billie.

The Angel of Death returns to visit the Charmed Ones, but they're shocked to learn that he's there for Leo. To stop him from taking Leo, Piper casts a spell that backfires, making every man a Leo lookalike, forcing Piper to take drastic measures and ask the Elders and the Avatars for help. Meanwhile, Billie (with Phoebe) continues her search for the truth behind Christy's disappearance and meets Burke, a demonic bounty hunter who freezes his victims into trophies. Using Burke's freezer, the Angel of Destiny freezes Leo and agrees to return him after a coming battle the Halliwells must fight, if Piper prevails.

When her parents come for a visit, Billie accidentally transforms them into assassins and also manages to contact a demon who is posing as a human. Meanwhile, Piper attempts to continue her life without Leo; Paige tries to make a connection with Henry; Phoebe tries to find a way to have her own life.

With the intention of helping his parolee get a loan, Henry, along with Paige, go to a bank -- but after being rejected, the parolee takes everyone at the bank hostage. Meanwhile, Phoebe and Piper have their hands full when, during Wyatt's third birthday party, Wyatt uses his projection power to turn three of his toys into real people. Unfortunately the situation at the bank degenerates when Henry is accidentally shot and a possessor demon, wanting to expose the Charmed Ones, possesses the parolee and tries to force Paige to orb Henry to a hospital and expose herself. Unexpectedly she develops the Whitelighter healing power and heals Henry's wound before switching places with Billie using her glamouring power. "Billie" is taken hostage by the demon who takes her to Magic School, but Paige then orbs them to the manor attic where Piper and Phoebe dispossesses the parolee and Billie vanquishes the demon.

Phoebe, in an attempt to move on with her own life, signs a lease for a new apartment, much to the worry of Piper, while Paige considers telling Henry she's a witch. Demons attempt to steal the Power of Three by taking the form and place of each sister, one by one, as each sister is shrunk and placed into a dollhouse replica of the manor.

During Chinese New Year, a demon attempts to steal a mystical wooden staff that is protected by the Zodiacs, and the staff's guardian enlists the aid of Piper to stop him. However, the staff concentrates each of the Charmed Ones' desires: Phoebe throws a housewarming party that gets out of control; Paige tries to get through to Henry about her magical abilities by taking him on a round-the-world orb; and Piper drops everything to run to her children's outing. Meanwhile, the guardian teaches Billie how to use her power of projection to find Christy and enlists her help to save the staff from the demons.

Paige learns the difficulties of dating a mortal when Henry becomes too involved in the magical world and has to deal with another magical suitor hoping to convince her to marry him so they can become the ultimate magical couple. Meanwhile, Billie finally finds her missing sister Christy; Piper faces a romantic decision when she runs into an old flame, and Piper must explain that Leo is coming back despite it looking like he abandoned his family.

Piper organizes an engagement party for Paige and Henry, but the wedding is put in jeopardy when the couple begins to get cold feet. Phoebe notices a strange man following her, and soon discovers that he is a Cupid. Meanwhile, a demon kidnaps Christy in order to lure the Charmed Ones into attacking the Triad, thus preventing them from taking over the Underworld. In a battle with the Triad at Magic School, Paige and Piper vanquish one by orbing him in front of a fireball and Piper blows up the second. The third flees, but unlike how they expected, Leo is not returned, showing that defeating the Triad was not the battle that they have to win to get Leo back.

Two former students of Leo's from Magic School turn up at the manor to inform the Charmed Ones that Noxon demons that Leo had imprisoned in the Magic School dungeons have escaped and are seeking revenge. Christy tries to get Billie away from the sisters, and Billie wants Christy to reunite with her parents. Paige goes on her honeymoon, and Coop continues to follow Phoebe. One of the Noxon demons is eventually vanquished by Piper and the students sending him to the Astral Plane in a perpetual vanquish, but beforehand, the two demons kill Billie and Christy's parents under orders from Candor, the last remaining member of the Triad. In retaliation, Christy vanquishes Candor, but he claims that by doing so she passed her final test to become evil.

Coop comes to the conclusion that he has fallen for Phoebe. Piper is on the hunt for the remaining Noxon demon in order to interrogate him about who he's working for, but Christy just wants to kill him as soon as possible. Paige finds it hard balancing life as a Charmed One with that of a married woman. When both the Halliwells and the Jenkinses find the Noxon demon, Billie and Christy combine their powers to vanquish an unvanquishable demon making Piper realize that Billie and Christy may be the ultimate power whom they must face in the coming battle.

Christy continues to try to corrupt Billie with the help of the demon Dumain, who work for the Triad; the two conspire to throw the sisters into a dream world so Billie can determine their true desires. Meanwhile, Piper consults an Elder who says that they may have to fight Billie and Christy to the death, and Paige gains a new charge in trouble with a Darklighter. Paige's charge is killed while Paige is in the dream world but becomes a whitelighter and later saves an injured Paige. After seeing the Charmed Ones' goals for normal lives, Billie opts to join Christy's plan to eliminate them because of their selfishness. After coming out of the dream world, Phoebe and Paige finally accept the truth about the Jenkinses.

Christy has now managed to convince Billie that the Charmed Ones are too self obsessed to help the 'greater good' so when Paige, Phoebe and Piper attempt to involve the rest of the magical community, Christy and Billie cast spells on the sisters that turn all the leprechauns and other creatures against the Halliwells. With their support, Christy and Billie then directly attack the Charmed Ones who attempt to escape to Magic School but find that it has been blocked from them and so end up in the underworld...

In the first half of the two-episode series finale, Billie and Christy have managed to turn everything around: while the two of them are now at the Manor and demons are at Magic School, the Charmed Ones are forced to hide in the Underworld. A battle of competing potions ends up injuring both sides, who each decide that they need to become more powerful. The Jenkinses and the Halliwells each absorb part of the Hollow, which the Jenkinses then use to steal Wyatt's powers and the Halliwells use to vanquish the Triad for good. The two sets of sisters attack each other in the Manor, not knowing the deadly consequences of their actions — Phoebe, Paige, and Christy are all killed and the Manor is destroyed in a massive explosion. The Angel of Destiny returns Leo, although the battle did not end as expected. Billie flees from Piper.

Reeling from the death of her sisters, Piper and Leo, using Coop's ring, travel back in time to change the events that led to the deaths of Phoebe and Paige. They encounter Patty (then pregnant with Phoebe) and Grams (just after Patty's death). While time-traveling, Piper and Leo also meet their future selves, indicating that they succeed. Meanwhile, Billie also tries to go back in time, but her past self ignores her. Patty and Grams help Piper recreate the Power of Three and vanquish the Hollow during the fatal battle, but the Jenkinses then disappear. Billie finally realizes that her sister has become evil after Christy admits being in league with the Triad. Grown-up Chris and Wyatt return from the future to find Wyatt's stolen powers, just as Billie comes to the Manor seeking the help of the Halliwells to save Christy. Dumain and Christy steal Coop's ring to time-travel and warn the Triad, but Billie (tracking Christy) transports the Halliwells to the same place, and the Triad and Dumain are again permanently vanquished. Billie tries to convince Christy, but when Christy launches a fireball at the sisters, Billie deflects it, accidentally killing Christy. At the end, everyone is returned to the proper time, and the sisters write down a narrative covering their future: Phoebe continues writing her column, marries Coop (permitted by the Elders), and has three daughters, with Billie looking after the first two when Phoebe goes into her third labour; Paige and Henry have twin girls and then Henry Jr., as Henry stays a parole officer and Paige becomes a full-time Whitelighter; Leo remains the headmaster of Magic School until retirement; Piper opens a restaurant; and Piper and Leo have a daughter in addition to Wyatt and Chris. In the final scene at the Manor, Piper's granddaughter, named Prudence, closes the front door with telekinesis (just like Prue) while the triquetra appears on the screen.