During the commemoration ceremony for the Specially Administrated Zone, Lelouch and Euphemia privately discuss Japan's future. She convinces him, and Lelouch summarily halts his rebellion, until he suddenly loses control of his Geass while jokingly telling her to kill all the Japanese. The Geass-influenced Euphemia orders a bloody massacre of the people attending the ceremony. Blaming himself, a resolute Lelouch decides to salvage the situation by declaring Euphemia's Specially Administrated Zone a trap to lure out the Black Knights, and commands his troops to defeat the Britannian forces, protect the Japanese, and stop Euphemia.
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's strategies give the Black Knights and their allies the upper hand in their battle against the Britannian Army. As riots break out through the country, the Black Knights take over the Ashford Academy as their headquarters, and the students are spared on Lelouch's orders. An enraged Suzaku, now informed of Zero's identity by a mysterious young boy named V.V., pursues Lelouch for revenge, which Cornelia also covets.
After managing to capture Cornelia, Lelouch forces her to reveal what little information she knows of Marianne's murder, but the answers do not please him one bit. V.V. takes Nunnally to Kaminejima, and Lelouch abandons the Black Knights to rescue his sister. Without Lelouch, the Black Knights begin to lose ground to the Britannian Army. Suzaku follows Lelouch, leading to a final confrontation between the former friends.