Lelouch believes Shirley may have discovered his identity as Zero, so he and C.C. pursue her to Narita. Ohgi explores the battlefield of the previous night, discovering the wounded Villetta Nu left for dead out of sight. Lelouch encounters Mao, a young man who also has the power of Geass. Mao uses his mind-reading power to play on Shirley's insecurities, manipulating her into shooting Lelouch, but she falters at the last moment and C.C. sends Mao away temporarily. Since Shirley is being torn apart by grief and guilt, Lelouch uses his Geass to erase her memories of him.

As Euphemia knights Suzaku, Lelouch establishes the hierarchy of the Black Knights. Diethard Reid suggests assassinating Suzaku, but Lelouch has other plans for him. He launches a plan to disable and capture Suzaku and the Lancelot at a Britannia military base on Shikinejima. The plan almost succeeds, but Second Prince Schneizel el Britannia appears and orders his floating battleship, the Avalon, to bombard the island.

The Ashford Academy holds their annual school festival. Ohgi, Villeta, Euphemia, and Kallen all make their separate ways to the event. A series of close encounters risks the revealing of hidden identities, but all those involved escape. Suzaku pilots the Ganymede for the festival's main event: making a giant pizza, slated to be the world's largest. When Euphemia's presence is revealed, mass panic ensues. On live television, she declares the Mount Fuji area to be the "Specially Administrated Zone of Japan", where Elevens can be referred to as "Japanese" again. She believes this will bring back the happy days with Lelouch and Nunnally, but Lelouch thinks otherwise, knowing she is being naive.

Left with no choice, Lelouch shoots and mortally wounds Euphemia in front of Suzaku. Suzaku returns to the Avalon with her battered body as the Black Knights continue to contain the violence. She succumbs to her injuries as Lelouch announces his plan for the creation of the United State of Japan. Alone, Lelouch grieves over his actions as C.C. comforts him, reminding him that she will stay alongside him, as per their contract. Soon, the entirety of Area 11 revolts against the Britannian Empire. Advancing with his massive army, Lelouch ignites the conflict by initiating the collapse of the Tokyo Settlement.

Lelouch deduces the nature of Rolo's Geass and convinces Rolo to spare him; in return, he will hand over C.C. Li Xingke confronts the Eunuch Gao Hai and kills him to take command of the consulate. As the deadline approaches, Guilford prepares to execute the captured Black Knights, until Zero appears, challenging him to a duel. Using the same strategy from the Black Rebellion, he collapses the portion of the settlement they are standing on, causing confusion amongst the Britannian military as they are dumped into Chinese territory. While Kallen and the Black Knights rescue the prisoners, Rolo appears in the Vincent to kill Lelouch for his betrayal. However, Lelouch takes a bullet meant for Rolo, giving the youth pause. Lelouch plays on his insecurities about his future and sibling relationship, convincing him to join his cause.

The Black Knights question Lelouch's decision, and the Britannian Army remains wary of his intentions. In a private conversation with Suzaku, Gino Weinberg, Anya Alstreim, Lloyd Apslund, Cécile Croomy, and Miss Romeyer, Zero requests he be exiled from Area 11 in exchange for delivering one million participants. The Britannians think he is abandoning them to ensure his own safety, and accept. At the opening ceremony, Zero asks Suzaku what it means to be Japanese, to which the Knight of Seven replies it is a shared heart. When every participating Eleven dresses as Zero on cue, Suzaku has no choice but to exile all one million "Zeroes", unwilling to start another massacre in the face of their peaceful resistance.