Intro: Leonardo does a quick recap of Parts One and Two, including the cliffhanger involving the exo-suited Baxter Stockman.
As Stockman directs his impressive array of mechanoid weaponry at Shredder and the Turtles, the mad scientist rants about how smart he is and what he’s going to do to the city and the world after he eliminates his two worst enemies. Once Stockman finishes his little speech, he let’s loose a barrage of hi-tech firepower on the Turtles, Splinter, Shredder, Hun and the Foot. Everyone ducks for cover and then comes up fighting against their new, common enemy, Baxter Stockman. The Turtles find themselves fighting side-by-side with the Foot and even the Shredder. Desperate times call for desperate measures.
Baxter easily defeats Hun and then turns his attention to the Shredder, who also falls quickly. The Turtles now face the vengeful villain alone. Things are going poorly for our heroes when Donatello manages to get a grappling hook and rope around the mechanoid's legs. Baxter scoffs at this tactic, but the Turtles then leap and kick him over the edge of the huge whole in the floor that Baxter made when he first entered the room. Stockman falls several floors and we hear a resounding crash. The Turtles turn their attention back to the Shredder - but Stockman isn't so easily defeated! The mechanical madman rises out of the floor, thanks to jet packs on his exo-suit, and the battle between men, mutants and machines is renewed.
During an intense charge, Leo manages to sever one of Stockman’s rocket-launching arms. Baxter is shocked but surmises that it's only momentary nuisance, but then the Shredder rushes in and cuts off one of the mechanoid's legs! With Baxter's exo-suit crippled, Raph, Don and Mikey attack with flying kicks and send the scientist flying through the windows and freefalling towards the ground far below. As Stockman falls, he cries out "This is only a momentary set back!"
With Stockman defeated, Leo raises his blade towards Shredder and says, "Let's finish this!" The Shredder replies, "I intend to!", but before the enemies can clash, Baxter Stockman returns! The exo-suited madman crashes through the windows, using his jet packs to float in the air. The scientist brags about his sophisticated suit (paid for with the Shredder's money) and then renews his attack. Donatello tells Leonardo to cut the lines leading to the mechanoid's battery-powered fuel cels. Leonardo makes his attack and is successful in cutting the cables, causing the Baxter 'bot to short out and collapse. However, the good doctor is only incapacitated for a few moments when he rises again, causing Leonardo to wonder what they need to do to get rid of the villain - ironically, Shredder states that he's often wondered the same thing.
Baxter once again begins to boast about his exo-suit's intelligent, self-sufficient design. Apparently every component of the cyber-armor has its own individual power source, thus it can still operate even when its main power supply has been severed. Donatello smiles and walks towards the arm that Leonardo severed from the suit. The brainy mutant looks at Baxter and says, "So what you're saying is, this arm should still be fully functional. Right?" Stockman mumbles "Oh no" and tries to escape. Don aims the rocket-arm and fires it at the exo-suit, sending Baxter flying through the windows yet again. This time the mechanoid does not fall, it's propelled by the rockets high into the sky and explodes.
With Baxter apparently finished, Shredder attacks the Turtles. The villain leaps into the air and prepares to deliver a killing blow to Michelangelo, but at the last second, Splinter jumps between the two and kicks his son to safety. Shredder then kicks Master Splinter, knocking the Sensei through the window where he begins to fall towards certain death! Putting any concern for personal safety aside, Leo throws a grapple hook around an exposed pipe and dives after his master. Miraculously, Leo catches Splinter and holds on as the grapple rope goes taut. The momentum of the fall carries the pair down to the helipad just below the Foot HQ building rooftop. Leonardo gently leans his injured Sensei against a wall. Splinter tells Leonardo to protect his brothers and defeat the Shredder, but the Turtle is reluctant to leave his ailing teacher. Splinter tells his son that that he knows he will do a good job leading his brothers. Leo sheds an anguished tear and then rushes to rejoin his brothers in the continuing battle with Shredder and the Foot. Leonardo arrives on the rooftop battleground and draws the Sword of Tengu, which sends tendrils of energy into the night sky. Leonardo screams at Shredder to get away from his brothers and then he fires a bolt of energy out of the blade which hits the villain, sending him flying into a pond. Shredder crawls out of the water and eyes the blade, knowing that with its power, he cannot be defeated.
Shredder summons an air force of Foot soldiers riding Razor Jets. April calls in a warning to Donny - but the Turtles have already seen the new threat. A pair of Guardians have been observing his action, and their leader reports to the Utrom Council Trio. The lead Guardian tells the Council that the Turtles have taken the fight to the Shredder's headquarters. The Utrom Council worries that Leonardo may lose the sword to the Shredder, and since they fear what may happen if the villain regains control of the mighty weapon, the Council authorizes the Guardians to fight alongside the Turtles. The Guardians are pleased to get this order.
A Razor Jet fires on Leonardo, knocking the Sword of Tengu out of his hands. Raphael manages to dislodge a Foot ninja and pilots one of the air cars himself, shooting down several of the enemy. Raph is still outnumbered and eventually gets into hot water, but Don fires rockets out of Baxter's severed robotic arm and destroys the flying foes that are chasing his bro. Leonardo then faces off with Shredder, who summons his Elite Guard and the battle escalates further. While Leo is distracted by the Elite, Saki walks over to the Sword of Tengu - but before he can grab the blade, Donatello shoots down another Razor Jet, which crashes into the very spot where the weapon was sitting. The Shredder begins to dig through the rubble for the blade. After a prolonged and difficult fight, the TMNT finally emerge victorious. Leonardo once again faces the Shredder, who once again summons more help. An elevator rises out of the ground holding over a dozen Foot soldiers.
Mikey groans, "Oh, give me a break!" when faced with more enemies. As the tension rises, a large group of Guardians leap into the picture between the TMNT and the Foot. The lead Guardian smiles grimly and offers their assistance to the mutants. Surprised, but relieved, the Turtles welcome the help. The tide then turns and the Foot appears ready for defeat, until the Shredder finally manages to dig up the Sword of Tengu. With the magic sword in his possession, the Shredder is an even more powerful foe. The Turtles tell the Guardians to deal with the rest of the Foot, while they concentrate on their evil leader. Moving as one, the Turtles get in close to the Shredder and attack simultaneously from four sides, raining kicks, punches, sword and sai strikes down upon their nemesis. Leonardo and Raphael finally manage to rip the blade from Shredder's grasp, sending it sailing across the grounds. Donatello tosses Leo the glove needed to wield the Sword of Tengu and the boy in blue leaps to grab both the glove and the blade.
Leo raises the Sword of Tengu and faces off against the Shredder, who has recovered the Turtle's abandoned katanas. The two foes stare one another down and then leap into action. Their figures pass by the moon and we hear the clash of steel. Leonardo and the Shredder both land on their feet, but as Saki stands motionless, we see his head fall from his shoulders! Leonardo has successfully used the Sword of Tengu to deliver a catastrophic blow to his arch enemy. With their leader defeated, the rest of the Foot are quickly defeated by the Guardians. The Guardian leader is amazed and pleased that the Turtles were able to destroy the Shredder. The trench coated warriors bow to their new allies, and depart.
Donatello surveys the scene and determines that they can use the power of the Sword to destroy the systems inside Foot HQ. Donny uses the severed robotic arm as a conduit between the Sword and the building's power supply. Leonardo stabs the blade into the arm, and its awesome power sends bolts of energy into the sky and throughout the entire skyscraper, short circuiting all systems in the Foot's headquarters. The Sword of Tengu explodes under the stress, and fires begin to rage throughout the structure. Police cars and fire trucks begin to arrive, leaving the TMNT no time to celebrate their victory, they need to clear the area. The ninjas go to retrieve Master Splinter, but when they get to the helipad, they find that he has disappeared! The only evidence of Splinter having been there is his walking stick. While the guys are numb from the shock of Splinter’s disappearance, they know they must leave. They jump into a Foot helicopter and fly off, leaving the Splinter mystery to be dealt with later.
In their hasty departure, the Turtles don’t notice the strange movement of the Shredder’s headless body. The figure moves across the rooftop, picks up its helmeted head and walks out of view through the rooftop flames...