After the unsuccessful assassination attempt on the Don, and Luca's death, Michael returns to the family and takes a greater interest in the family business.
Michael protects his father while he is in hospital, but suffers a broken jaw from the police captain. In retaliation, Sonny orders a hit on the rival Tattaglia's family - killing the Mob boss's son.
A meeting is called - Michael is taken in a car to a restaurant with the police captain and Sollozzo. They already knew the location, and a gun was hidden in the toilets. Michael returns after a quick break and shoots both men. He is then taken out the country for safety - to Sicily. Fredo is sent off to Vegas.
Carlo beats his pregnant wife to get Sonny to come straight over for a trap, and on the journey past the toll road Sonny is gunned down. Don is told of the death, and arranges a peaceful meeting with the Five Families to negotiate a truce.
In Sicily, Michael has fallen in love and married quickly - but it ends in tragedy when one of his bodyguards plants a car bomb that kills his new wife.
At the meeting with the five families, Don is told of the drug plans again, and after pondering the negative effects of drug use agrees to help as long as the drugs are not sold to kids, and that Michael can return home. He also figures out that Barzini is behind the war, and not the other family.
After a year back home, Michael asks Kay to marry him, and is effectively running the business now the Don has semi-retired. While playing with his grandson outside, the Don suffers a heart attack and dies.
Michael attends church to be Godfather to his sister's baby. Meanwhile a series of hits have been planned concurrently - where most heads of the rival families are taken out, and all those who have been a traitor to the Corleone's - including Tessio, and Carlo (Michael's brother-in-law).
It ends with Michael as the new Godfather.