John Watson is in his first meeting with his therapist for eighteen months. Struggling to explain his visit, he eventually chokes out the words, "My best friend, Sherlock Holmes, is dead." The episode flashes back to three months earlier, with Sherlock receiving plaudits and gifts from various people for whom he has solved cases, along with much unwanted media attention, especially for his recovery of a Turner painting of Reichenbach Falls.
Meanwhile, Moriarty proceeds to break into the case where the Crown Jewels are kept, while simultaneously opening the vault at the Bank of England and unlocking all the cells at Pentonville Prison via his mobile phone. Before smashing the Crown Jewels' case, he writes the words "Get Sherlock" on the outside, to be seen by the security cameras. He then allows himself to be caught by the police wearing the jewels and sitting on the throne. Sherlock is called to testify at Moriarty's trial. Sherlock explains that Moriarty is a criminal mastermind. Moriarty has threatened the families of the jurors. After being acquitted, Moriarty visits Sherlock and tells him, "I owe you". Meanwhile, John is summoned to see Mycroft, who explains that some professional assassins have moved into flats on Baker Street and asks him to watch out for Sherlock.
Sherlock and John investigate the kidnapping of the children of the British Ambassador to the U.S., Rufus Bruhl, part of a plot by Moriarty to make others suspect that Sherlock has been staging all his cases himself. He has traumatised the girl so she is terrified of Sherlock when seeing him, causing Sergeant Donovan to suspect Sherlock. A reluctant Lestrade is forced to arrest Sherlock, but Sherlock escapes with John handcuffed to him as his 'hostage'. They realise Moriarty's "Get Sherlock" has convinced the criminal underworld that Moriarty has given Sherlock the computer code he used to pull off his triple heist, a code that can bypass all security systems.
Sherlock and John break into the house of a journalist, Kitty Reilly, poised to publish an exposé on Sherlock. There, they find that Moriarty has created a fake identity, Richard Brook (or Rich Brook, "reichen Bach" in German), an actor whom Sherlock supposedly paid to pose as a master criminal. Now a wanted man with his media image on the verge of plummeting, Sherlock launches a final gambit. Leaving John, Sherlock contacts Molly at the hospital, where he confesses that contrary to what she herself believes, she does matter to him, and that he's always trusted her. There he reveals his vulnerability to Molly, confirming her earlier "deduction" that he was "not okay", that he's going to die and asks her if she's willing to help, telling her that he "needs her". John goes to the Diogenes Club to question Mycroft and learns that Mycroft divulged Sherlock's personal information during interrogations of Moriarty. Meanwhile, Sherlock deduces that the anti-security program was encoded in the tapping of Moriarty's fingers during his earlier visit.
John finds Sherlock at the Bart's lab but leaves after hearing Mrs Hudson has been shot. Sherlock texts Moriarty, who meets him on the roof of the hospital to resolve what the criminal calls their "final problem". Sherlock claims that, with the code, he can erase Richard Brook electronically. Moriarty reveals that there is no code, he just bribed security men, and that Sherlock must commit suicide or Moriarty's assassins will kill John, Mrs Hudson and Lestrade. Sherlock realises that Moriarty has a fail-safe and can call the killings off. Sherlock then convinces Moriarty that he is willing to do anything to make him activate the fail-safe; after acknowledging that he and Sherlock are alike, Moriarty tells Sherlock "As long as I am alive, you can save your friends," then commits suicide by shooting himself in the mouth, thereby denying Sherlock knowledge of the abort codes and the ability to prove that Moriarty does exist.
With no way to use the fail-safe, Sherlock calls John, who is rushing back from 221B Baker Street after realising the report about Mrs Hudson was a ruse. Claiming that he was always a fake and explaining this last phone call is his "note", Sherlock throws himself from the roof of St Bartholomew's Hospital as John looks on from the street, thereby ensuring that Moriarty's true identity dies with him. After being knocked to the ground by a cyclist, John stumbles over to watch, in a daze, as Sherlock's bloody body is carried away by hospital staff.
The episode returns to John's therapy session, where he is unable to open up. Mycroft is shown reading the tabloid newspaper The Sun with a front page headline "Suicide of Fake Genius." Later, John visits Sherlock's grave with Mrs Hudson. There, he reaffirms his faith in Sherlock and begs him not to be dead. As he walks away, Sherlock looks on from the shadows before also walking away.
