The 14 hopefuls all meet up in New York and are given their first assignment: Innovation. Taken to a place where they are to get their materials, the designers are shocked to see it is a grocery store. They have a budget of $50, one hour to make their purchases, and one day to complete their designs.

Another day begins, and the designers are to design a dress that represents 'Envy'. They have a budget of $50 and one day to complete the design. As they finish, the designers are surprised to be told that their dresses will be put for sale in a private auction, with whomever gets the most bids winning the challenge.

The designers can finally design something actually wearable. For this challenge, the designers must create a party dress that could appeal to Banana Republic's customers. The winner, instead of being granted immunity, will have their dress marketed and sold at select Banana Republic stores. They have to pick their fabrics at the studios and have two days to complete their designs.

The designers show their prospective designs to rock singer Sarah Hudson, who picks the three whose designs she liked best: Jay, Kevin, and Austin. Those three are the team leaders and they have to pick two others to be on their team and, as a group, they will work on the group leader's design. Each team had $150 and one day to complete their design.

The designers learn that their selected model will be their client, and they must design a wedding dress of their model's dreams. They have a budget of $300 and two days to complete the design.

The designers create swimsuits that are functional enough to swim in the pool, yet sophisticated enough to wear to an event. They then attend a fashion-industry party with their swimsuit-clad models. The winner will be the designer who receives a mention in the New York Post gossip column "Page Six." The designers have a budget of $75 and 5 hours to complete the design.

As one group, the designers will create a collection, one carrying the theme "the year 2055." One designer is to lead, taking responsibility for the overall vision, while each designer will sketch and create an outfit of his or her own for the line. Each designer has a budget of $50 and one day to complete their look for the collection.

Designers redesigned the uniform worn by United States Postal Service workers. They have a budget of $100 and one day to complete the design.

This week's challenge is to design a dress for the host of Access Hollywood, Nancy O'Dell. Nancy will help judge the runway and wear the winning design on the red carpet at the 2005 Grammy Awards. The designers have $300 and two days to complete the design.

A special reunion episode, the 12 designers all reunite to talk about what happened behind the scenes on Project Runway. When people are confronted and questions are answered, the fabric starts flying.

Tim Gunn visits the final three designers at their homes to show the progress of their collections. Each designer must create a twelve piece collection for a showing at New York Olympus Fashion Week. After months at home to prepare, the final moment has come to show the world their collections.

After auditions in New York, Houston, Miami, and Los Angeles, the 16 contestants being considered for this season's cast were given six yards of plain white muslin, $20, and one week to create an outfit that best represents who they are as a fashion designer. After arriving, the 16 contestants find that only 14 positions were available in the Parsons workroom and thus two will be eliminated at the runway judging.

Heidi throws a roof-top party for the designers. At the party, she announces their next challenge: each must create an outfit using nothing besides the clothes he or she has worn to the party. They have one day to complete their designs.

The contestants are asked to design for a global star… Barbie. The winning designer's outfit will be duplicated for the My Scene Barbie collection. The designers have a budget of $150 and two days to complete their designs.

The remaining designers must design a lingerie line consisting of three looks. The twist is they have to do it as teams, each with a lead designer and two assistants. The designers have a budget of $200 and one day to complete their collections.

The remaining designers must each create a dress for prominent socialite Nicky Hilton. The designers have a budget of $150 and two days to complete the designs.

The designers, in five teams of two, must create a day-to-evening ensemble for Banana Republic, as well as a compelling and successful window display advertising the clothing. Each team has to finish their garment in one day.

The designers have to get sporty to create a garment for 2006 Olympic silver medalist Sasha Cohen. The designers have a budget of $150 and two days to complete the design.

The contestants have to draw inspiration from their surroundings while outside in New York. The designers have a budget of $100 and one day to complete the outfit.

Designers must create a look using only natural materials purchased in the flower district. The designers have a budget of $100 and one day to create the garment.

The designers must design a makeover look for another designer, who will then model the new look on the runway. The designers have a budget of $200 and two days to complete the outfit.

The contestants face off in the final competition before the Olympus Fashion Week finale. They must design an evening gown that will be worn by supermodel Iman. The designers have a budget of $300 and two days to complete the outfit.

The 16 contestants reunite to discuss their personal highs and woes during the various challenges and reflect on just how the show has changed their lives.

In Part 1 of the season finale, the finalists return to their homes to create the line that will be shown at Olympus Fashion Week. The episode includes a look at the contestants' personal lives as Tim Gunn makes a visit to each of their homes. Back in New York, they have to complete one final challenge: each will make an additional garment that they'll design with the aid of one eliminated contestant.

In the conclusion of the finale, the remaining contestants complete their 13th look and polish the rest of their collection. Then they present their lines to industry insiders at Olympus Fashion Week.