Heidi throws a roof-top party for the designers. At the party, she announces their next challenge: each must create an outfit using nothing besides the clothes he or she has worn to the party. They have one day to complete their designs.

The designers face the challenge of modernizing a look for a famous "fashion icon:" Cher, Farrah Fawcett, Pam Grier, Audrey Hepburn, Katharine Hepburn, Madonna, Marilyn Monroe, Jackie Onassis, Diana Ross, or Twiggy. They have $150 and two days to complete their designs.

The designers are taken to the offices and design showroom of fashion living-legend Diane von Fürstenberg. Their challenge is to create a look for her Fall 2008 collection, inspired by the movie A Foreign Affair. They have 15 minutes inside von Fürstenberg's sample room to select fabrics and one day to complete the outfit.

In the conclusion of the finale, the remaining contestants ready their collections for the runway. They have $300 and four days to finish their looks. Then they present their lines to industry insiders and the judges in order to be crowned the winner.