The story opens as Gandalf and Pippin journey eastward to Minas Tirith, the city of Gondor. There, they encounter Denethor, the city's ruler, who takes an instant dislike to Gandalf. Out of gratitude to Denethor's son Boromir, who earlier in their quest, sacrificed his life for the hobbits, Pippin pledges his service to Gondor. Overhead, a dark cloud known as the Darkness begins to spread from Mordor over Minas Tirith. Meanwhile, Aragorn, fearing that the Riders may not arrive in time to defend the city from the impending Mordor conflict, takes the perilous Paths of the Dead to Gondor, gathering a massive army of the undead along the way.

Back in Gondor, Denethor sends his remaining son, Faramir, to fend off the advancing Mordor armies at Osgiliath. Despite Gandalf's assistance, Faramir concedes defeat and withdraws, only to be struck down by a poisoned arrow from one of the Nazgûl. As the battle rages outside, Denethor spirals into madness and locks himself inside a crypt with the unconscious Faramir, wanting to end the line of Gondor's Stewards. Just as the Mordor forces threaten to breach Minas Tirith's defenses, the Riders of Rohan arrive to repel the enemy. Yet, amidst the battle, King Théoden is slain by the Lord of the Nazgûl, only to be avenged by Lady Éowyn and Merry. The Mordor forces retreat, only for Aragorn to appear with the black ships of the enemy, which he has commandeered with the help of the dead.

In the final stages of the battle, Pippin and Gandalf manage to save Faramir from Denethor who, in his despair, immolates himself. After this, Aragorn enters Minas Tirith, healing those injured during the battle and thus fulfilling a prophecy about the next king of Gondor. The leaders of the West then decide to launch a distraction assault on Mordor to draw Sauron's attention away from Frodo, the Ring-bearer. As this is happening, Sam rescues Frodo from the tower of Cirith Ungol, and the two hobbits, disguised in Orc clothing, begin their arduous trek through Mordor. Eventually, they reach Mount Doom, where Frodo, succumbing to the Ring's power, refuses to discard it. Gollum, appearing suddenly, struggles with Frodo, biting off his finger with the Ring, before accidentally falling into Mount Doom. This results in Sauron's defeat and the liberation of Gondor. Frodo and Sam are rescued by Gandalf, who arrives on the back of Gwaihir, a giant eagle. Aragorn is crowned King of Gondor, marrying Elrond's daughter Arwen, and Gondor begins its recovery.

The hobbits return to the Shire, finding it under an oppressive police state. They rally a rebellion to overthrow the intruders, revealing their secret leader as the deposed wizard Saruman. Though Frodo spares Saruman's life, Wormtongue, Saruman's aggrieved servant, betrays and kills him. After rebuilding the Shire, the hobbits return to their normal lives. Sam marries Rosie Cotton and they have a daughter. However, Frodo, bearing the scars of the Ring-quest, decides to leave the Shire, sailing away with Gandalf, Bilbo, and the other Ring-bearers to a peaceful paradise in the unknown West.