One night, Haruhi's power is activated without her knowing, and both she and Kyon become trapped in a sealed reality at their school. As Haruhi goes out on her own, Kyon is met by Itsuki, who tell Kyon that Haruhi might have created this world to be alone with Kyon. Yuki contacts Kyon via computer and gives the hint of Sleeping Beauty as a means to return back. Kyon and Haruhi are forced to evacuate when blue giant entities appear and begin to destroy the school and the surrounding area. Using hints provided by Yuki and Mikuru beforehand in order to defuse the situation and escape, Kyon kisses Haruhi as he expresses his desire to return to the old world. It remains unknown whether or not this world is the old one or a new one, however the three other members are glad to see Kyon back again.

The future Mikuru tells Kyon where to find a certain person that he is supposed to help. Kyon and Mikuru travels back in time to the Tanabata of three years ago. Carrying the sleeping Mikuru, Kyon finds the young Haruhi herself from middle school. After helping her draw strange drawings on her school yard, Haruhi questions him on the existence o aliens, time travelers, espers, or sliders; and Kyon suggests that they might. After Haruhi leaves, Kyon wakes up Mikuru and finds that she has somehow lost her time traveling device, or TPDD. He takes her to the Yuki of three years ago and helps them return to their proper time.

After the busy island adventure with the SOS Brigade and a family trip to visit relatives in the countryside, Kyon is just settling in to relax for the final two weeks of summer vacation. Unfortunately for him, Haruhi wants to get everything she can out of the precious time remaining, in the company of the SOS Brigade. As such, the group is taken on a whirlwind tour of summer activities, from swimming pools to summer festivals, part-time jobs, and bug hunting. Finally, Haruhi has made it through her entire list, and the last day of August arrives. Though Kyon tries to make up for lost time by doing his neglected summer homework, he eventually gives in to distraction, going to bed just before midnight.

Like the previous episode, Kyon's easy going summer vacation is interrupted as the group is taken on a whirlwind tour of summer activities, from swimming pools to summer festivals, part-time jobs, and stargazing. However, Kyon is wracked by a constant sense of déjà vu. Koizumi is likewise troubled, while Nagato seems even more detached than usual. They finally work out the truth: Haruhi has put the last two weeks of August into an infinite loop because she refuses to let summer end. They find out that the loop has repeated 15498 times. However, none of them can devise anything to stop the cycle from repeating. On the second-to-last day of summer, Kyon calls out after Haruhi in a last-ditch attempt to stop her from leaving unsatisfied, but fails to think of anything he can do, and she leaves. As the last day of vacation arrives, Kyon, resigned to the loop repeating itself, goes to bed without finishing his summer homework.

The same exact events in the previous episode once again unfold with slight variations and the gang wearing different clothes. Once again the Brigade, with the exception of Haruhi, finds out that they are trapped in an infinite loop. In this 15,499th loop, Kyon and the others once again are unable to discover how to escape the endless summer. In the same scene in the restaurant, Kyon is unable to stop Haruhi from leaving, hence dooming the world to another summer loop. Kyon again goes to sleep without finishing his homework on the last day of summer.

The previous time loop continues for the 15,513th time. This time, Kyon mentally senses an even greater familiarity with events and places from previous cycles. Once again, none of the Brigade members can devise anything to stop the cycle from repeating. On their final meeting in the restaurant, Kyon tries to call out after Haruhi but fails to do anything as visions of the loop's events flash in his mind. As Kyon regains his senses, Haruhi has left. As the last day of vacation arrives, Kyon, resigned to the loop repeating itself, goes to bed without finishing his summer homework.

The previous time loop continues for the 15,521st time. As the last day of vacation arrives, Kyon stays up late until midnight finishing his summer homework alone without any assistance. The final scene shows Kyon's clock ticking away on his desk but cuts out to the ending video one second before the clock strikes 12:00am.

The previous time loop continues for the 15,524th time. Kyon goes to bed without finishing his summer homework once again.

The loop continues for the 15,527th time. The scene where Kyon answers Haruhi's call loops twice, the scene in which Kyon notices Yuki at the pool loops twice, and the scene where Haruhi says she left the last day of summer open just in case also loops twice. Kyon once again goes to bed without finishing his summer homework.

The loop continues for the 15,532nd time. But as Haruhi leaves, Kyon knows what to do to break the endless loop of summer.

North High School is preparing for the North High Festival. Kyon and Haruhi's class, class 1-5, decides to do some questionnaire. Haruhi does not like that decision and tells Kyon that the SOS Brigade will do something more interesting. She decides to make a movie clip that has Mikuru as the protagonist. One day, after school, Haruhi, Kyon, and Mikuru go to stores in order to get a camera and airsoft guns.

Preparation for the SOS Brigade's short film continues, with character roles revealed—Yuki as an evil alien, Itsuki as an esper, and Mikuru as a battle waitress from the future. Mikuru is forced to dress in an embarrassing waitress costume for her role, while Yuki appears as a witch. On the first day of filming, the Brigade film two commercials to advertise their sponsors with Mikuru dressed in her waitress costume and then her bunny girl costume, much to her embarrassment. They then film several scenes in a park, and Kyon points out that Haruhi did not actually write a script.

Shooting of the SOS Brigade's short film continues. During the battle scene, Haruhi is displeased with Mikuru's acting. She yells at her, demanding that Asahina try to shoot a laser beam from her contact-lens-colored eye, but Kyon manages to cool her down . Afterwards the scene is reshot but, to the surprise of everyone except Haruhi, Mikuru actually shoots laser beams from her eye. Yuki knocks Mikuru down and apparently takes her contact lens. In a conversation Itsuki explains to a shocked Kyon that Haruhi changed reality once again and Nagato proves his words by showing her hand, burnt while protecting Kyon from being hit by the laser. Koizumi promises to take care of Mikuru's problem with Yuki's help. The rest of day is spent on shooting more scenes with Mikuru dressed as a bunny girl. The next day Kyon finds out that Haruhi dragged Tsuruya, Taniguchi and Kunikida to help. After Haruhi gets off to pick up Mikuru, Itsuki explains to Kyon that Yuki succesfully helped Mikuru get over herself. Haruhi returns with Mikuru, who secretely tells Kyon how Yuki helped her: she bit her to inject nanomachines into her body. Haruhi leads everyone to the next shooting location, a lake near Koizumi's house.

As the SOS Brigade shoot more of their film, Haruhi tries to give Mikuru another contact, ergo another superpower. Yuki quickly takes action and injects her with more nanomachines before any damage could be done. Despite the weird phenomena Haruhi's film is causing, Itsuki suggests it is better than more closed spaces being opened up. However, when Kyon discovers Haruhi arranged for Mikuru to be drugged for a kiss scene with Itsuki, he gets furious at her shabby treatment of Mikuru and almost hits her, forcing Itsuki to hold him back. This causes Haruhi to become depressed, having always thought Kyon would support her. Kyon, reluctantly learning something from Taniguchi, later apologizes to Haruhi and filming resumes. However, he seems to have inadvertently encouraged Haruhi even more, making cherry blossoms grow out of season.

Deciding Yuki needs a familiar for her role, Haruhi picks up a stray cat and names it Shamisen. However, when Haruhi leaves that day, Shamisen starts talking as a result of Haruhi's powers. Itsuki suggests that they need to remind Haruhi her movie is a work of fiction, before reality takes any more damage. The next day at school, Mikuru gives him a coupon for her class's yakisoba café, and gives her views on Haruhi that she couldn't say in front of Itsuki. Kyon later talks with Yuki, who throws up the idea that one of them, including herself, may be lying. As shooting resumes, Haruhi's powers to continue to make Mikuru a deadly weapon. Itsuki calls Kyon out later that night, asking him to find a way to hold back Haruhi's powers. Kyon convinces Haruhi to add a disclaimer at the end, saying the film is a work of fiction, and the rest of the shooting goes without a hitch. Kyon falls asleep whilst editing the movie, only to find it has edited itself overnight. At the very last of this episode, there is a flashback to May that Kyon tries telling Haruhi that Yuki, Mikuru and Itsuki are actually aliens, time travelers and espers, but she doesn't believe him.