On August 10, 2010, a.t.b., Japan was conquered by the Holy Empire of Britannia. Seven years later, teenage student Lelouch Lamperouge finds himself pulled into a battle between anti-government terrorists and the Britannian Army in the Shinjuku Ghetto. In the midst of the conflict, a mysterious, green-haired girl saves him from death by granting him "the power of the king", which allows him to compel others to do his bidding.

Suzaku transfers into Ashford Academy and faces the scorn of the Britannian students. Cornelia continues her hunt for Zero, destroying several rebel strongholds but finding no clues to his whereabouts. A stray cat slips into the Lamperouge residence on campus and takes off with Lelouch's Zero mask and a massive, comedic chase involving the entire student body follow. The Emperor of Britannia makes a speech during Prince Clovis' funeral on the virtues of inequality and the social battle for evolution and betterment.

Cornelia sets a trap for Zero at the Saitama Ghetto as she begins to clear another resistance cell. Despite C.C. trying to stop him, Lelouch takes the bait and goes to the aid of the Saitama resistance. His plan falls apart from a combination of Cornelia's superior tactics and the resistance cell's dissimilar motivations. Lelouch is cornered and nearly discovered, but C.C. dons his Zero costume and distracts the Britannian Army, allowing Lelouch to escape. Lelouch blames his defeat on the undisciplined rebels and resolves to build something better than a mere resistance unit.

Kallen and Lelouch separately reflect upon the deaths of innocents in the Narita campaign. Shirley secretly follows Lelouch and witnesses the battle between the Japan Liberation Front and the Britannian Army, which Lelouch ends by detonating the Japan Liberation Front freighter as the Britannian Knightmares begin to board it, killing all personnel on board and giving the Black Knights the element of surprise. Suzaku attacks Lelouch, easily overpowering his weaker Burai with the Lancelot, forcing him to eject. He crash-lands near Shirley and is knocked unconscious. Shirley prepares to kill him to avenge her father, but hesitates when his mask falls off, revealing to her that Zero is Lelouch.

As Euphemia knights Suzaku, Lelouch establishes the hierarchy of the Black Knights. Diethard Reid suggests assassinating Suzaku, but Lelouch has other plans for him. He launches a plan to disable and capture Suzaku and the Lancelot at a Britannia military base on Shikinejima. The plan almost succeeds, but Second Prince Schneizel el Britannia appears and orders his floating battleship, the Avalon, to bombard the island.