Gandalf and Pippin arrive in Minas Tirith and explain to Denethor, the Steward of Gondor, how his son, Boromir, died. Pippin offers his service to Denethor as compensation for Boromir's death. Pippin is dismissed after being questioned and is looked after by Beregond who tells Pippin about the expected attack.
Meanwhile, Aragorn meets with thirty other Rangers who have come with Elrond's sons, Elladan and Elrohir. They carry news from Elrond about the Paths of the Dead and they carry a gift from Aragorn's love, Arwen. Merry is appointed the Squire of King Theoden whose army must ride to Gondor hastily to help fight Sauron's army.
However, Aragorn must take a different path to Minas Tirith through the Paths of the Dead. Aragorn used the palantir and revealed himself to Sauron, and showed him the sword that defeated Sauron many centuries earlier. Aragorn intended to put doubt into Sauron's mind once again. Once again, Legolas and Gimli accompany Aragorn on this dangerous journey. Aragorn intends to call upon the dead to fullfill their oath, which they failed to do centuries ago, and Isildur cursed them to never rest again until they fulfilled their oath to heir to the throne of Gondor. Eowyn disguises herself as a man and takes the name of Dernhelm, who takes Merry, who is left behind, on her horse.
Back in Gondor, Pippin sees Faramir is returning, being chased by five Ringwraiths. Gandalf, Denethor, and Pippin soon learn from Faramir that Frodo is alive and gives them hope the goal may still be achieved. Faramir is forced to man the front lines of the battle and a army of Orcs and Trolls is rapidly approaching lead by the Lord of the Nazgul, the Witch-King, who can not be killed by any man. Faramir comes back into the city badly wounded. Denethor stays by his son's body, while Gandalf takes control of the armies. Denethor prepares a tomb for Faramir, although he is still alive. Pippin realizes this and desperately tries for find Gandalf.
The Rohirrim arrive and the Witch-King goes to meet this new army. King Theoden's horse is struck by the Nazgul, and Eowyn challenges the Witch-King. The Dark Rider sneers that no mere man can kill him, but Eowyn takes off her disguise and cuts off the head of the winged creature the Nazgul rode on. The Dark Rider moves in to kill Eowyn, but as he does Merry thrusts his sword into his back while Eowyn stabs the Dark Rider in the front. The Dark Rider vanishes, but Merry becomes paralyzed.
Aragorn now comes with the Dead and defeated Sauron's southern army.They took boats and sailed towards Sauron's main army. Aragorn opens Arwen's gift and finds it is a insignia of Gondor with the embems of the house of Elendil signifying the return of the King.
Back in Minas Tirith, Pippin informs Gandalf of Denethor's madness. Denethor refuses to give up his Stewardship and sets fire to the pyre on which Faramir lies, carrying the palantir with him. Eowyn and Merry join Faramir in the houses of healing. Aragorn comes and helps their recovery using forgotten herbs. Gandalf advises they must now fight Sauron's army inside of Mordor, hoping to avert his eye away from Frodo and Sam.
All the while Sam and Frodo continue their perilous journey. Sam is outside the Tower of Cirith Ungol trying to rescue Frodo. The Orcs have argued over this prize and gives Sam an oppurtunity to enter the Tower using the Ring to make him invisible until he finds Frodo and rescues him. They disguise themselves in Orc uniforms continuing towards Mount Doom.
Frodo becomes too weak, and the ring becomes to heavy until Sam is forced to carry Frodo on his back. They are attacked by Gollum, and Sam fights him while Frodo makes his way to the top of the Mountain of Fire. Frodo can not bring himself to cast the ring into the fire and puts the ring on.
Gollum breaks free of Sam and leaps onto Frodo and bites Frodo's finger off, and falls into the fire. The ring is destroyed, and so is Sauron's power. Sauron's army's are now mindless, and without direction, and retreat in terror. Three Eagles come and rescue Frodo and Sam from the mountainside.
In Minas Tirith, Eowyn and Merry have been healed in the House of Healing, but they have two new patients in: Frodo and Sam. Aragorn takes his place as King of Gondor and marries Arwen who has arrived from Rivendell, and gives up her immortality.
Gandalf and the four hobbits begin to head home. They stop at Rivendell and Bilbo passes all of his notes of history to Frodo, telling him to make an account of all the recent events. Then they arrive at the Prancing Pony at Bree, and hear that the Shire has been turned into a police state. Gandalf leaves the hobbits to visit Tom Bambadil.
The hobbits return to the Shire and find that Saruman has taken over, making the hobbits slaves, and using Men to administer discipline. The hobbits organize a revolution, and their is a short battle, the hobbits coming out victorious. Grima Wormtongue cuts Saruman's throat out of anger towards Saruman's treatmetn towards him. Wormtongue runs, but is shot down by arrows from the hobbits.
Sam renourishes the Shire, using the fine dust that he recieved from Galadriel, making a miraculous vegetation growth in the Spring. Sam marries Rosie Cotton and live with Frodo at Bag End. Some years later, Frodo tells Sam they must make another journey. They travel west, and meet with Elrond, Galadriel,Gandalf and Bilbo. They are set for the Grey Havens. Sam is joined by Merry and Pippin, who make a tearful good bye to Frodo.