Ozai continuously blasts away at Aang's earth shield and taunts him.
On an air ship within the fleet, Toph Metalbends the rudder to make the ship spiral into the others. A Fire Nation soldier on the ship spots them and tries to blast them off. They evade his attack only to fall off. Sokka tries to break the fall his sword, but instead lands on a platform which breaks his leg. Toph is left dangling off the edge, holding Sokka's hand. Two firebenders approach to attack them on either side, so he uses his boomerang and sword to ward them off, losing them both. Even so, more Firebenders come, and Sokka and Toph are seemingly doomed. They only saved by another incoming air ship crashing into the one they are on. They land on it and discover Suki was driving it.
Aang in the Avatar State bending all four elements
Ozai's firebending overwhelms Aang's stone sphere, and causes Aang to nearly lose consciousness from the heat. Ozai charges up an attack and destroys the sphere, causing Aang to hit the scar on his back against a jagged rock. Aang's seventh chakra finally opens and he enters the Avatar state. He grabs Ozai by the beard and easily shrugs off a counter attack, blasting him against a rock with a powerful gust of air. Ozai watches as Aang ascends into the sky using Airbending and calls forth the other three elements: fire, earth, and finally water. The four elements revolve in rings around Aang while in the Avatar state.
In Ba Sing Se, the Order of the White Lotus is successfully liberating the city. Bumi takes down several Fire Nation tanks and Iroh burns down the Fire Nation flag on the Earth Kingdom palace.
Aang, possessed by the Avatar State, charges at Ozai and knocks him into the sky with Airbending, but Ozai recovers before Aang can get to him again. Ozai flees by using Firebending to propel himself at great speeds. Aang Earthbends small fragments of rock to shoot at him like bullets, though Ozai barely manages to evade them all and continues fleeing.
Back at the Fire Nation capital, Azula relentlessly shoots fire and lightning at Katara and drives her away from any water. She taunts Zuko as he writhes in pain on the ground. Though Katara finds water to bend, Azula is too quick for her to attack and flees from her immense flames. Eventually she discovers chains and water underneath a grate in the plaza, and lures Azula above the grate. She traps herself and Azula inside a large splash of frozen water barely a second before Azula was going to blast her. Katara unfreezes the water around herself then binds Azula to the grate with the chains. She releases the water and runs to Zuko to heal him. He thanks Katara, and she says she should be thanking him for protecting her. Azula sees her brother rise unharmed and writhes in anger, still chained to the ground, screaming and Firebending with her breath. Her anger subsides and she cries and screams uncontrollably as Katara and Zuko watch.
Aang, still possessed, continues to pursue the Phoenix King and tried to crush him between two stone pillars with Earthbending, but Ozai manages to stop himself in time. Ozai tries to counterattack, but continuously fails against the power of the Avatar State. Aang catches him with Waterbending and subdues him with shackles by Earthbending. He then states with the voices of all the previous Avatars that Ozai and his forefathers had devestated the balance of the world and Ozai must now pay the ultimate price. The possessed Aang proceeds to deliver the final blow, a combination of all four elements into one attack, but at the last instant Aang regains control over himself and leaves the Avatar state. He turns his back to Ozai and says that he's not going to end it like that. Ozai taunts him again for his weakness and tries to attack while Aang's back is turned, but he's quickly disabled and imprisoned again with Earthbending. Aang remembers what the Lion Turtle taught him, and uses a new type of bending, Energybending, to strip Ozai of his Firebending power for good. However, the risk of Energybending is that if your own spirit is bendable, you can be destroyed. Ozai's red energy begins to envelop Aang untill only his right eye remains but then Aangs blue energy breaks through and envelops Ozai completely, thus removing Ozai's firebending.
Ozai tries to Firebend at Aang, but finds he can't bend. Then, Aang demonstrates his newfound control over the Avatar state and Waterbends to cause the tide to rise and wash away the fire burning the land. Sokka, Suki, and Toph meet up with Aang as Sozin's Comet departs Earth. They congratulate Aang and wonder if Ozai, collapsed on the ground, is dead. Ozai snarls he's still alive, and Aang tells them he used Energybending to remove his Firebending. Sokka seizes the opportunity to taunt Ozai and calls him "The Loser Lord." Ozai weakly tries to defend his title as the Phoenix King but passes out from exhaustion. Toph insults his title by calling him the "Phoenix King of Getting His Butt Whooped," and Suki tries to make fun of him too, but does a poor job. The sky fades from red back into night.
At the Fire Nation palace, Zuko is trying to dress himself for his coronation, but is having trouble due to his injuries. To his surprise Mai arrives and helpes him, and he is glad to see she was released from prison. She and Zuko kiss, but afterwards she starkly warns him not to break up with her ever again.
Everyone is soon reunited in the Fire Nation capital city. Katara and Sokka find their father Hakoda, who tells them he is proud of their accomplishments, and their mother would be proud of them too. Suki reunites with the rest of the Kyoshi Warriors, and Sokka is distressed to see Ty Lee dressed in uniform among them. Paranoid, he assumes she's disguising herself again until Suki tells him Ty Lee officially joined. Ty Lee explains she bonded with the warriors in prison and after a few chi blocking lessons, she was allowed to join, saying they will be "Best Friends Forever".
Zuko approaches Aang before his coronation, and the two of them reminisce about how different their lives were a year ago; Zuko obsessed with capturing the Avatar and Aang frozen in a block of ice, now they are friends. Aang can't believe how different the world is, and Zuko comforts him saying they will rebuild it together. They hug, and coronation begins in the plaza. Zuko states that the war is now over and gives Aang the credit for saving the world as everyone cheers. Zuko is crowned Fire Lord and declares the start to a new era of love and peace.
Zuko later pays his imprisoned father a visit. He tells Ozai that banishment was the best thing that ever happened to him, as it put him on the right path. He hopes perhaps prison will give Ozai the same chance for redemption. Zuko then demands Ozai tell him where his mother Ursa is, but an answer is not shown to be given.
A few weeks later in Ba Sing Se, life has improved (a stack of Fire Nation tanks is used for Earthbending games) and the scene cuts to the Jasmine Dragon, where Zuko and Iroh help serve tea to the gang (including Mai) as they relax. Sokka is painting a group portrait to remember the good times, but it is crudely drawn. Katara complains her oversized "hair loopies" make her look like Momo, Zuko complains his hair isn't that spikey, Mai looks like a man, Suki is portrayed Firebending to add excitement and Iroh has a big stomach. Iroh tells them he's really trimmed down his weight, and Toph tells them she thinks they all look perfect, a joke on her blindness which causes everyone to laugh.
Aang smiles and steps outside the tea shop and pets Appa. Katara follows him out, they both embrace in a hug, then kiss. The words “The End” are etched into the sky.
